US Announces China Textile Safeguard Guidelines


On 3 April 2003, at the 54th Annual Meeting of the American Textile Manufacturers Institute (ATMI), Under Secretary of Commerce for International Trade Grant Aldonas announced that the US government has finalised the process for employing the textile safeguard provision contained in China's World Trade Organisation (WTO) accession protocol. This China-specific textile safeguard will remain in effect until 31 December 2008. Under this provision, the US retains the right to impose quotas to address surges in imports of textile and apparel products from China that have been "integrated" into the WTO trade regime, ie, removed from quota. Aldonas also noted that studies have shown China gains a 30-40% price advantage solely from its currency peg.

ATMI Chairman Van May welcomed the announcement by saying, "We look forward to working with the government to help them quickly review ATMI's existing petitions on knit fabric, dressing gowns, brassieres, luggage and gloves, as well as further petitions we might file on other affected products, and to impose the safeguard". ATMI is now evaluating other textile and apparel categories where imports from China are seen as disrupting the US market. However, May bemoaned that it had taken so long for the process to be approved, as Chinese imports "have continued to surge in the seven months since we first asked the government to take action". ATMI's press release also noted that over the past year, imports of Chinese textile and apparel products have increased by 135%. Meanwhile, numerous US textile mills have closed and more than 25,000 US textile jobs have been lost.

Under the new procedures, safeguard petitions may be filed with the Committee for the Implementation of Textile Agreements (CITA). CITA then has fifteen days to decide whether the petition meets minimum standards. Requesters must provide CITA with specific information in support of a claim that Chinese-origin textiles or apparel products are causing a market disruption or threaten the orderly development of trade in such products. Among other things, the required information will include import data going back five years, US production data for the same period and market share information detailing Chinese gains.

Subsequently, CITA will solicit public comments on the request. Following the fifteen-day public comment period, a determination on whether CITA will request consultations with China will be made within 60 calendar days of the close of the comment period. Should the US government decide to request consulations, a Federal Register notice will announce this decision and the minimum quota, which will come into force immediately. A 30-day consultation period will follow, and could be extended to 90 days.

Aldonas also announced the conclusion of the first stage of the textile marker project undertaken by the DOC with the help of the Oak Ridge National Laboratory of the US Department of Energy (DOE). This technology is designed to remedy the problem that the origin of fabrics and yarns can be difficult to determine, which compromises enforcement of US apparel import preference programs that require the use of US fabrics and yarns. Once fully developed, this marker system could be used by US textile manufacturers to mark their products and by the US Department of Homeland Security's Bureau of Customs and Border Protection (CBP) in its origin verification efforts.

With these initiatives the Bush administration seeks to mollify the despairing US textile industry, parts of which still cling to the fading hope that the US government will provide similar relief for the textile industry as it did for the steel industry in 2002. While the Bush administration has formalised the provision of textile safeguard guidelines, it is unlikely that it will go this route shortly, particularly because the steel industry bailout was a presidential election campaign promise in the year 2000, and it affected important swing states, such as Michigan, Pennsylvania, Ohio and West Virginia. Additionally, the same does not apply to the southern textile producing states, which are firmly in President George Bush's corner. This factor reduces the US textile industry's political leverage further. Nevertheless, particularly where US imports of Chinese textiles and apparel are concerned, the outcome will also be influenced by the overall health of the US economy.


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