WASHINGTON — As U.S. trade negotiators head to the negotiating table with the Chinese this week, they will come armed with the latest apparel and textile import data from June, which further illustrates China’s dominance of the sector.
Textile and apparel imports from China rose 46.55 percent in June, as many of the pending safeguarded categories on which the U.S. is considering imposing quotas posted increases of 1,000 percent or more, the Commerce Department’s latest trade data revealed Friday.
China’s increase of 537.9 million square meters equivalent to 1.69 billion SME in June far outpaced the rest of the world’s growth of 261 million SME, and contributed to the highest volume of imports for any month and first half on record, according to Naomi Freeman, international trade specialist at Commerce’s Office of Textiles & Apparel.
Apparel imports from China in June skyrocketed 444 million SME to 723 million SME, while total apparel imports from the world rose 298 million SME to 2.06 billion SME. On the textile front, imports from China grew by 94 million SME to 970 million SME, while total global imports fell by 37 million SME to 2.48 billion SME.
The release of the trade data came as the U.S. and China prepare to hammer out the details of a comprehensive quota restraint agreement this week in San Francisco. The data should give further momentum to a call for a broad textile and apparel quota restraints.
David Spooner, special textile negotiator with the U.S. Trade Representative’s office, will lead an interagency government team comprising officials from the Commerce, State, Labor and Treasury Departments in meetings Tuesday and Wednesday.
U.S. retail, importer and textile executives, and domestic trade groups all agree on the need for a broad agreement, but differ on what the deal should contain. U.S. trade officials have not hinted at the scope of any deal they are considering, but the European Union’s comprehensive agreement struck with China in June — allowing for 8 to 12.5 percent growth each year on import categories through 2007 — could be the starting point for negotiation.
Under the current safeguards quotas, imports are capped at a 7.5 percent growth rate annually and are renewable through the end of 2008.
“The trade data released by the U.S. government today demonstrates that the job-killing import surge from China continues unabated,” said Auggie Tantillo, executive director of the American Manufacturing Trade Action Coalition. “The U.S. government needs to negotiate an effective, comprehensive agreement to limit U.S. textile and apparel imports from China to stop the job losses.”
Tantillo said an “effective comprehensive agreement” for the textile industry would:
- Cover all categories where safeguard petitions have been filed or approved;
- Cover any categories that have been disrupted or face “imminent disruption” where safeguard categories have not yet been filed;
- Limit the growth of targeted imported products to near the 7.5 percent cap though the end of 2008;
- Include penalties on quota limits for illegally transshipped goods.
He also noted the agreement should not contain any commitments by either the U.S. or China to take off the table an extension of the safeguards in the global round of trade talks.
In the first half of the year, total apparel and textile imports from China rose 46.64 percent to 7.8 billion SME. Apparel imports alone from China jumped 125.19 percent during that same period.
The value of textile and apparel imports from China increased to $7.4 billion for the year to date through June, compared with a value of $3.76 billion in June 2004.
Among the 11 pending safeguard categories, imports of Chinese cotton and man-made fiber nightwear — a category CITA said it was considering for further review — leaped 1,160 percent in June versus June 2004, while imports of “other synthetic filament fabric” and cotton and man-made fiber sweaters — two categories on which the U.S. postponed a final determination to impose quotas — rose 1,593 percent and 1,329 percent, respectively, in June.
Meanwhile, imports from China in product categories currently under safeguard quota — seven categories of goods valued at $1.31 billion in annual imports — also increased drastically in the month as many importers raced to get their goods into the U.S. before the categories face embargoes.
Importers, who have lobbied against the safeguards, have changed their position and are now seeking a broad textile agreement to bring more predictability to the supply chain.
Julia Hughes, vice president of international trade at the U.S. Association of Importers of Textiles & Apparel, said the June import data was skewed.
“June was obviously a big shipping month because everyone knew there was a limited amount of time to get the product to the U.S. due to the safeguards,” said Hughes. “The China numbers for June are obviously bigger than they would have been because the safeguards pushed them up.”
Hughes noted China imports’ growth has remained steady at about 40 percent every month, “reflecting the fact that the threat from China is not as large as some are trying to portray it.”
She said a comprehensive textile agreement with China should not try to “re-create the past in terms of putting everything under quota.”
Importers plan to argue against restraining Chinese goods that are not produced in the U.S., such as sweaters, woven dress shirts, dressing gowns, and silk and other vegetable fiber garments, luggage and handbags. They don’t want a deal to allow safeguards on categories not included in the broad agreement, according to a “position paper” obtained by WWD.
In addition, they plan to press for the release of all goods under embargo and not have them charged against future quotas. On growth rates, they are planning to recommend an optional formula based on whatever percentage of annual growth rate is set for calendar year 2005. This rate would then be allowed to increase by 20 percent in 2006, 25 percent in 2007 and 30 percent in 2008.