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US Seeks New Protectionism on Imports of Textile Product

The United States is on the way to impose quota limits on the exports of socks from China, seeking relief similar to what the Bush administration provided makers of three other textile products last year.

The move could lead to new protectionism of the US textile industry, analysts say.

The US textile industry petitioned the Bush administration on Monday to curb the import of socks from China, saying they are squeezed.

The US Department of Commerce now has until July 20 to decide whether to take the case filed by four textile groups and then will have at least three more months to conduct an investigation and decide whether to grant the request for import relief.

The industry asked that a quota be imposed that would cap the growth in Chinese sock imports at 7.5 percent over the next year.

The petition by US sock makers was similar to the relief obtained by US manufacturers of bras, dressing gowns and knit fabric last November.

The China Chamber of Commerce of Import and Export of Textiles, which represents the interest of the country's embattled textile traders, said it has noticed the US move and has reminded exporters of the importance of cushioning the likely risks.

Comments from the Ministry of Commerce, the country's trade watchdog, were not available.

Chinese sock exporters say they are closely watching the appeal and expressed concern over the possible US trade limits.

"Losses are inevitable if the quotas are imposed," said the manager of a Guangdong-based sock producer which has a large exposure to the US market.

The unnamed manager said he and his company is "reluctantly" considering reducing the dependence on the US market.

"We just can't understand why China's cheap and good textile products are always put under unequal treatment," he said.

The southern Guangdong Province has already seen a slump of its exports of socks, after the US imposed severe quality inspections in the past months.

The province sold a total of 12.4 million pairs of socks to the US in the first four months of the year, representing a year-on-year decrease of 10.7 percent, local customs data showed.

Beijing-based experts say the US appeal runs against the free trade spirit that is enshrined by the Agreement on Textiles and Clothing that phase out textile quotas globally, adding the move might dampen the already friction-packed trade ties between world's two major trading powers.

Fan Ying, a professor at China Foreign Affairs University, cautioned the sock prices in the US might increase if the import quotas are approved.

"It will be a loss-loss situation if the US abuses such a special safeguard measure," she said.

According to the General Administration of Customs, China exported a total of 770 million pairs of socks valued at 1.51 billion yuan (US$182.6 million) from January to April, an increase of 4 per cent and 9 percent respectively.

The US move also accelerates Chinese textile exporters' concerns that more counter-import measures will be targeted at China after the global multi-fiber textile quotas expire in 2005.

Analysts have cautioned textile makers and exporters to remain alert and not to be overoptimistic about the business opportunities during a post-quota era.

"For one thing, the World Trade Organization (WTO) members are allowed to impose special safeguard measures on Chinese textile exports until 2008, as a condition of China's WTO entry in 2001," Fan said. "Safeguard measures will continue to be slapped on the Chinese exporters."

And technical barriers will also increase even after the quota restriction is phased out, she added.

(China Daily July 3, 2004)

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