Industry Forges on as China Talks Sputter

A deal to regulate Chinese imports might still come to pass, but U.S. textile firms and apparel importers are starting to move on as the prospects for an...

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The dynamic in the industry has also changed, since, in a rare incident of consensus, textile and importing interests called for a deal. Safeguards, which need to be renewed annually through 2008, now hold $1.9 billion worth of Chinese imports to 7.5 percent annual growth.

For the first eight months of this year, apparel and textile imports shot up 46.1 percent to more than 11 billion square meter equivalents, worth $15.4 billion. That rush was prompted by the elimination of a global quota system in January. Textile groups were hoping a deal would save them from having to reapply for safeguards, but reapplications for 2006 have already been filed.

Since the safeguards, which China agreed to when it joined the World Trade Organization, last only through the end of 2008 and importers are already buying for the second half of 2006, a deal becomes less important as time wears on.

U.S. Trade Representative Rob Portman said on a conference call recently that he was “forever hopeful” that an agreement could be struck. He said, “We had a very generous proposal for the Chinese, but it was not generous enough for them. Frankly, I’m disappointed.”

A U.S. trade official said, “We’ve largely agreed on growth rates for 2006, but we haven’t come to agreement on growth rates in future years.”

Even if an agreement is reached, it would not extend beyond the end of 2008, when the safeguard caveat expires. So textile groups are working to make ongoing protections against non-market economies such as China a part of the WTO’s Doha trade talks, which are continuing, but face a key planning meeting in December.

“People feel they need a [new] safeguard because there is no sense that China is reforming its trade practices, and is going to be as deadly in 2009 as it is today,” said Cass Johnson, president of the National Council of Textile Organizations.

NCTO and AMTAC are part of the Global Alliance for Fair Textile Trade, which has 97 members and is pushing for textile-specific talks in the Doha round.

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