CHINA: U.S. BROKE PACT IN TRANSSHIPMENT CASE

Byline: Kristi Ellis

WASHINGTON — China is claiming that the United States violated its bilateral textile agreement when the U.S. charged alleged illegal transshipments of Chinese goods three years ago against China’s 2001 quotas last week, according to wire reports in Beijing.
The Committee for the Implementation of Textile Agreements instructed the U.S. Customs Service last week to reduce China’s quota in about 11 different categories by a total of 486,200 dozen units, valued at $28 million, for illegal transshipments in 1998. The quota categories include knit shirts, woven shirts, sweaters, trousers and underwear. Only one category, cotton underwear, will be immediately embargoed until the end of the year.
“The United States made the cut [in quotas]+without presenting clear evidence,” wire reports quoted a Chinese Foreign Trade Ministry spokeswoman as saying. “The action by the U.S. government is a violation of the bilateral textile agreement and is unacceptable to the Chinese government.”
Officials at the Chinese embassy here did not return calls by press time.
The bilateral agreement allows the U.S. to reduce China’s quota by three times the amount of illegal transshipments. The bilateral pact states that triple charges may be imposed on illegal shipments that enter the U.S. within a certain three-year time period.
Brenda Jacobs, general counsel for the U.S. Association of Importers of Textiles and Apparel, claimed that all of the alleged transshipments that were triple charged against China’s 2001 quota did not fall within the required time period.
But a U.S. trade official who requested anonymity disagreed with Jacobs’s contention and downplayed the response from Chinese officials.
“Not all of the shipments were tripled charged,” the trade official said. “Those that were triple charged met the three-year requirement.”
The trade official noted that the U.S. has had several transshipment consultations with China over the course of the agreement.
“Every time they [Chinese officials] investigate our findings, and every time they say the evidence is not sufficient,” the U.S. trade official said. “From the U.S. perspective, the agreement calls for clear evidence and we’ve met that standard.”
The trade official called the chargebacks and triple charges “pretty routine. It’s a very small amount in the scheme of overall trade.”
The U.S. imported a total of $6.5 billion worth of textiles and apparel for the year ending Sept. 30, 2001.
“In the realm of textile and apparel business, it is not a significant amount,” agreed Jacobs, “but there is a principle here.”
The other point of contention is that the U.S. made the chargebacks against quota effective one day before China formally entered the World Trade Organization, which means China could have a difficult time disputing the action before the WTO.

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