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Washington Outlook Archive

Textile War With China Escalates

James A. Morrissey, Washington Correspondent

The textile cold war with China is getting hotter and hotter.

As the US government continues to restrict imports of Chinese textiles and apparel using the safeguard mechanism permitted under China's accession to the Word Trade Organization (WTO), Chinese trade officials have cried foul and are seeking ways to stop the process. First of all, China said the use of the safeguard mechanism was not in the spirit of free trade and that it is simply being used as a scapegoat for the US textile industry's inability to compete. It said the United States and the European Union were responsible for much of the problem with import surges because they continued to impose tight quotas on Chinese textiles and apparel up to the very end when quotas were removed in January. China showed little interest in negotiating with the United States and see restrictions placed in imports unilaterally by the United States as an apparent intention to bring more and more products under new import quotas as unfair trade.

In a move to circumvent any additional textile trade restrictions, China said it would voluntarily impose tariffs on exports of 74 textile and apparel product categories, but said the tariffs would not be placed on any products where the United States already has imposed restrictions. At the present time, the US government has some two dozen safeguard actions in various stages of evaluation and approval. In a sharp reversal just a few days after announcing the tariffs, China called off the whole deal and threatened to start a dispute proceeding at the WTO.

The battle flares up just as US Commerce Secretary Carlos M. Gutierrez is due to arrive in Beijing later this week for meetings on textiles, alleged currency manipulation and other issues resulting in Chinas $160-billion trade surplus with the United States.

June 1, 2005