Most Recent Articles In Fashion Features
Latest Fashion Features Articles
- Bridget Foley's Diary: Home for the Holiday? Not These Days
- Gucci to Sponsor Tapestry Exhibition
- Model Call: Josilyn Williams
More Articles By
WASHINGTON — After unleashing global trade from the restraint of quotas on Jan. 1, the dust is far from settled, but China has lived up to expectations and emerged as the primary beneficiary of the change.
Imports of Chinese apparel and textiles worth $4.8 billion entered the U.S. in the first quarter, a 60.5 percent jump compared with a year earlier, when trade among World Trade Organization countries was under quota constraints.
Among the other winners in the post-quota world are India and Bangladesh, which have large, low-cost workforces and significant manufacturing infrastructures.
"It's too early to draw the definitive conclusion," said Steve Lamar, senior vice president of the American Apparel & Footwear Association. "You're starting to see some trends shaping up that might be early indicators of longer-term trends."
One of these is the movement of production to China, but it will take time for sourcing patterns to adjust to a new trade landscape, he said.
"These shifts are going to take some time," he said. "It's not like you're all of a sudden going to see everything go overnight."
Propped up for years by the quota system, other countries, such as Mexico, lost ground in the importing game. Also losing out was Hong Kong, which largely finished goods produced in China and then shipped them to the U.S.
"The fact that they had a lot of quota made them competitive in the marketplace," said Michael Delaney, chief executive officer of Ralsey, a division of sourcing giant Li & Fung. "When that buffer or that barrier isn't in place, it becomes apparent that the underlying economics are not strong enough to support it."
However, sourcing since January has been a bit of a guessing game for vendors. When it joined the WTO in 2001, China agreed to temporary quotas, which could be applied to specific goods and renewed through 2008. These restrictions are meant to safeguard the domestic industry and ease it into the transition.
Safeguards quotas were imposed Friday on cotton knit shirts and blouses, cotton trousers and cotton and man-made fiber underwear, valued at $624.5 million annually, and petitions on another $3.35 billion worth of goods are pending. Vendors are vexed over whether those categories of goods will have fresh quotas imposed.