Seeking Certainty Over Safeguards

Apparel importers find themselves chafed by new restrictions on goods from China.

Additionally, of the seven categories of goods under restriction, three of them — cotton knit shirts, cotton trousers and cotton and man-made fiber underwear — are on track to come under embargo this week. (See full chart this page.)

Once the quotas, which are tracked by U.S. Customs and Border Protection, are filled, no more goods will be allowed into the country. This sets up a mad rush to the border, with some companies expected to fly in last-minute goods to beat sea-bound shipments.

A report on the Web site of the official Chinese news service last week warned manufacturers to stop shipping trousers to the U.S., citing statistics from the China Chamber of Commerce for the Import and Export of Textiles. The report said trouser exports had already exceeded 103 percent of this year's quota.

The European Union also moved to apply safeguards, but didn't quite get there. Instead it reached a deal with China keeping annual growth in 10 categories of goods in the range of 8 to 12.5 percent. The deal extends to 2007, ending a year earlier than safeguards theoretically would.

The administration is pressing China on a number of fronts, including its enforcement of intellectual property laws and its currency policies, and might use a deal on textiles as a way to further its overall China agenda.

If a deal is struck, it's possible that it will be met by at least some groans from either importers, domestic textile firms or both. There is support for some sort of a deal on both sides, though.

Missy Branson, senior vice president of the National Council of Textile Organizations, said her organization has encouraged dialogue with China, particularly because it would provide predictability.

Branson said an agreement that capped growth around 8 to 12.5 percent would bear consideration, though cutting a deal that opened up trade before safeguards are scheduled to end would be harder to swallow.

"We couldn't support anything that didn't cover through 2008," she said.

More than the specific terms of an agreement, Tom Haugen, president of sourcing giant Li & Fung USA, was interested in settling the matter. "We need clarity and predictability because uncertainty is our biggest enemy. Any deal would be positive."

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