US trouser quota against WTO principles
By Dai Yan (China Daily)
Updated: 2004-10-31 22:50

US import limits on China-made trousers will violate WTO principles once effected, said textile producers and exporters that are greatly concerned.

The Committee for the Implementation of Textile Agreements (CITA), an interagency group of the US Government, announced on Friday it will consider a request by the domestic textile industry to place quota caps on shipments of China-made cotton trousers.

The China Textile Import and Export Chamber of Commerce said in a statement that the petition not only violates provisions of the Agreement on Textile and Clothing but also the fair and free-trade principles of the World Trade Organization (WTO). "It's an extreme example of trade protectionism," said the statement released late on Friday.

A spokesman for the China National Textile Industry Council (CNTIC) said the entire Chinese textile industry and its normal export trade would be heavily affected if the US government approved the appeal.

"The move appears to be more political since the US government made the decision days before the country's presidential election," said the spokesman.

Jia Bo, a manager from the Beijing-based Yameng Textile Company, a sheet producer, said it is "ridiculous" that the US Government would decide the fate of Chinese pant producers by pure speculation.

The petition was based on a threat that Chinese trousers would disrupt the US market once quotas are lifted, rather than on evidence that market disruption was actually happening, he said.

"I am worried the sheet and other textile industries will suffer if this case is accepted," he said.

The US textile industry has also filed petitions for "threat-based" limits on Chinese shirts, sheets and other textile products.

"Our sheets are exported by quotas. I do not understand how the US Government can say that we will disrupt the market if the quota is lifted just because we are competitive," Jia said.

The Chinese Government rejected the move, claiming it would violate WTO principles of free textile trade and hurt trade relations.

"The Chinese Government reserves the right to take further actions under the framework of the World Trade Organization," said Ministry of Commerce spokesman Chong Quan.

The move was the latest in a long and bad record of textile protectionism, Chong said.

"The decision violates conditions delineated in legal documents for China's WTO admission and US domestic rules on the procedure," Chong added.

Chinese trouser products are still subjected to quota management policies and will enjoy free market trade flow after January 1 2005 when textile quotas are canalled.

"This will severely frustrate and harm Chinese confidence in the international trade environment after its WTO accession, and also harm the interests of US cotton growers, consumers, importers, fabric machinery makers and US investors in China," Chong said.

The Chinese Government urges Washington to handle such cases "cautiously" and "amend its errors" to avoid damaging Sino-US trade relations, Chong said.

vice-President for the US National Retail Federation, Erik O. Autor, said neither the evidence cited in the petition nor detailed grounds for US Government's decision were being made public.

Accusing CITA of "operating in a black box," Autor added: "Based upon the record so far, I would be surprised to see CITA reject any of these petitions."

The Bush government has taken a series of steps to suggest it blunts the impact of the January quota removal,a system that has governed the industry for three decades.

The Bush government has decided to impose safeguard measure on Chinese imports of socks, knit fabric, dressing gowns and bras. But those products do not have quota limits.

CITA has 90 days to solicit public input and rule on the petition. If it is upheld and no agreement is negotiated with China, the US can limit imports of the targeted goods to 7.5 per cent above the previous year's imports.

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