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US Action on China's Textiles Seen as Excessive
Newly released measures by the United States to restrict exports of Chinese textiles exceed China's commitment to the World Trade Organization (WTO), and should be lifted for the benefit of both nations, suggest Chinese trade and industry officials.

The safeguard measures against China's textiles took effect on May 21.

"The US Government applied to China's WTO commitment on textiles at will, and the measures are irrational," said Sun Huaibin, director of the Research Center of China Textile Economy affiliated with the China National Textile Industry Council.

The US Government's judgment is subjective that China's abrupt increase in exports of textile products has hurt the US textile industry, Sun argued.

US officials have not given a clear definition of market disruption, he added.

According to China's WTO commitments, US manufacturers of the same category of products can apply to implement safeguard measures on their Chinese competitors

But now the list of US complainants has grown to include manufacturers of partial textile products, even workers' organizations, Sun added.

Moreover, specific safeguard measures invoked in accordance with China's WTO commitment should not be used repeatedly after their expiration. Such measures are generally valid for one year.

But the US ruling allows such measures to be implemented repeatedly if the US Government considers it necessary to impose restrictions on China's textile exports.

Although the US Government has been required to review and revise the process, little substantial progress has been achieved in the subsequent bilateral consultations.

Under the terms of China's WTO accession, WTO members may impose specific safeguard measures, or quotas, on Chinese textiles and apparel products if they determine such shipments from China threaten or disrupt their markets.

Under the terms of China's protocol of accession, the United States may impose special quotas on imports from China up to December 31, 2008.

If the United States requests a consultation, China is required to automatically limit its shipments to at most 7.5 per cent above the amount implemented during the first 12 months of the 14-month period preceding the consultation request.

As a matter of fact, China has honored its WTO commitments on textile products, including reducing import tariffs, and the country's market for textile products has opened wider than that in the United States, Sun said.

Statistics released by China's General Administration of Customs indicate China last year imported US$447 million worth of textiles and apparel from the United States, up 23.04 per cent year-on-year.

China imported US$200 million worth of such goods during the year's first quarter, up 190 per cent year-on-year.

China imported 110,000 tons of cotton from the United States, 170 times greater compared with the same period last year.

The textile industry, one of China's major traditional industries, has been hit hard in recent weeks by the spread of severe acute respiratory syndrome.

The sector could suffer even greater losses as a result of the safeguard measures, suggested Cao Xinyu, vice-chairman of the China Chamber of Commerce for Import and Export of Textiles.

Exports of textiles and apparel to China are no less important than exports of agricultural products to the United States, he said.

China exports about 40 per cent of its textiles and apparel. More than 50 per cent of Chinese-made apparel is manufactured for export.

Experts estimate output of China's textile industry will fall half a percentage point if the country's exports of textiles and apparel drop 1 per cent.

That, the experts said, could result in 36,000 layoffs.

China's export volume of textiles and apparel to the United States last year amounted to US$62.68 billion. That accounted for nearly 20 per cent of the country's total export volume.

(Business Weekly June 11, 2003)

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