US expands curbs on clothing from China
(Agencies)
Updated: 2005-05-19 13:44

The additional quotas, which will take effect once Washington formally requests consultations with Beijing on the issue, include trousers, shirts and yarn not covered by a similar U.S. action announced last week.

"Today's announcement demonstrates this administration's continued commitment to America's textile manufacturers and their employees," Commerce Secretary Carlos Gutierrez said in a statement. "We will enforce our trade agreements to ensure that U.S. companies get a fair deal as they compete in the global marketplace."

The action comes as the Bush administration is under tremendous pressure from Congress to reverse the huge U.S. trade deficit with China. China's long-time practice of pegging its currency at 8.28 yuan to the dollar has also angered many lawmakers, who charge it is an unfair trade practice.

U.S. imports of clothing from China have risen dramatically since January 1, when a decades-old international quota system was phased out as the result of a 1994 world trade deal.

However, China agreed when it joined the World Trade Organization in 2001 to let member countries impose emergency import restrictions on its clothing and textile shipments to prevent "market disruption."

Beijing has protested moves by both the United States and the European Union to restrict its clothing exports. But both insist they are acting within WTO rules.

The new U.S. curbs on synthetic trousers and shirts, non-knit shirts and some cotton yarns stem from petitions U.S. industry groups filed in late 2004.

Those petitions, which were based on the threat that imports would surge when the quotas were removed, have been the subject of a legal battle between retailers and textile groups. A federal appeals court only recently cleared the way for the Bush administration to consider them.

The import restrictions will raise the cost of doing business for retailers like Wal-Mart who expected to rely heavily on China in the post-quota world.

Laura Jones, executive director of the U.S. Association of Importers of Textiles and Apparel, said the Bush administration action would not help the textile industry survive.

"They're making people jump through hoops for something that's not going to save any jobs. This business (making clothes) isn't going to come back here," she said.

The quotas, which will limit the growth in China's shipment of key clothing products to 7.5 percent above the previous year, "mean no business will be placed in China (for those items) in the fourth quarter and maybe the third," Jones said.

Restrictions "unfair to China"

China's commerce minister Bo Xilai slammed the United States and European Union for "unfair" and "protectionist" actions to counter its booming textile exports while dismissing claims it manipulated its currency to gain an unfair trade advantage.

Bo blasted developed countries for arguing for global standards on free trade when they enjoyed absolute advantages but then placing restrictions when their interests were threatened.

Under World Trade Organisation (WTO) rules, such "double standards are not allowed," he said.

The US and the EU were unreasonably blaming China for rapid growth in its exports and were taking "protectionist" actions to counter this.

"This is unfair," he said, adding that these kind of moves "undermine the solidness of WTO rules and generate a negative impact on the ongoing round of (WTO trade liberalization) talks."

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