WASHINGTON—Textile manufacturers in the United States are engaged in a protracted legal battle aimed at limiting a surge in imports of cheap Chinese textiles, a battle that could lead to a show-down between developing economies and their richer trading partners at the World Trade Organization (WTO).
Textile manufacturers want an extension of import restrictions on Chinese products to protect U.S. markets from the boom in cheap imports since the lifting of global textile quotas at the beginning of this year. They are currently stymied by a Dec. 30 ruling from the Court of International Trade in New York.
"Since Jan. 1, almost two months now, China has been free to flood this market with as much textile and apparel products as it can make," Cass Johnson, president of the National Council of Textile Organizations in Washington, told RFA's Wu-dialect service.
"The last time we saw this, when quotas were opened up on a smaller number of products three years ago, they moved very quickly and flooded the market massively. So we are very concerned that the damage is happening now, and we have no safeguards in place to put a stop to it," Johnson said.
The industry is also hoping that pressure to limit Chinese imports will mount with other major trading partners in the WTO, resulting in an extension of temporary import quotas to the end of 2008.
"I think this is a question that's not only important to the U.S. industry but it's important to the world textile industry, writ large, and that is if you are a textile worker and you have a choice between maybe losing your job in 2005 or 2008, I suspect that most people would like to work and get paid for another three years," Lloyd Wood, spokesman for the American Manufacturers Trade Action Coalition told RFA.
"There's nothing out there to say that these safeguards can't be extended by an agreement with the WTO, and I don't think that the world has a particular interest in seeing the economies of literally dozens of countries being destabilized because the World Trade Organization cannot rationally address the textile issue," Wood said.
They have to find ways to be competitive. There are many of their colleagues in the United States who long ago recognized what they had to do and are doing it, to survive.
But critics—who include U.S. retailers keen to move large volumes of cheap Chinese goods—blast the safeguards as protectionism, purely designed to shield U.S. manufacturers from competition.
"There are many of their colleagues in the United States who long ago recognized what they had to do and are doing it, to survive," said Laura Jones, executive director of importers' group USA-ITA, referring to the relocation of factories to low-cost developing economies, especially China.
Jones, whose group represents U.S. retailers in the court battle over import restrictions, said an attempt to extend import restrictions via the WTO was unlikely to succeed, because other developing, low-cost, exporting economies would oppose the move.
"They have to find ways to be competitive," Jones said.
Official media reports in China suggest that a surge in imports has indeed taken place, although figures are not yet available for the first quarter of 2005.
On Mar. 2, the official English-language China Daily newspaper reported that the China Chamber of Commerce for Import and Export of Textiles was considering setting minimum prices for some products in an effort to head off foreign restrictions.
"Exports of trousers to the United States saw an eight-fold increase year-on-year, while the average price dropped by 30 percent," the paper quoted chamber chairman Wang Shenyang as saying.
I think this is a question that's not only important to the U.S. industry but it's important to the world textile industry, writ large.
Wang was referring to export figures for the first two months of the year, which he said had boomed in the wake of the ending of global textile quotas on Jan. 1, 2005.
China exported U.S.$95.1 billion of textiles and apparel worldwide, in 2004, according to Chinese statistics. U.S. figures show that the United States imported U.S.$17.8 billion, or 18.7 percent of those exports.
U.S. imports of Chinese textiles and apparel rose by 25.3 percent compared with the previous year.
The U.S. textile industry argues that China takes an unfair advantage by undervaluing its currency, offering state-supported loans and allowing labor conditions that would be unacceptable in the United States.
"The industry could be suffering severe damage," Johnson told RFA reporter Michael Lelyveld. "We are convinced from what we've seen in the trade that China is right now pouring millions and millions and millions of garments into the U.S., and that number will only increase over time."
There are signs that China may be moving of its own accord to limit exports. Premier Wen Jiabao set a goal of just 15 percent for export growth this year after a 35.4-percent rise in 2004.