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USTR Threatens Action On Chinese Textile Subsidies

James A. Morrissey, Washington Correspondent

US Trade Representative Susan C. Schwab has warned the Chinese government that unless it takes actions to eliminate certain textile export subsidies, she will take an anti-subsidy case to the World Trade Organization (WTO). The threat was revealed in a letter to Sen. Elizabeth Dole, R-N.C., who had expressed her concern over allegations of some 73 subsidies called to her attention by the National Council of Textile Organizations (NCTO).

In her letter to Dole, Schwab said: “We understand and share your longstanding commitment to challenging unfair trade practices  that violate World Trade Organization rules and deny a level playing field to American industries and workers. Our initial analysis confirms your concern that Chinese subsidy programs appear to raise serious WTO issues.” While she did not specify which subsidies are under attack, Schwab said she has directed her staff to intensify its analysis of whether such subsidies violate China’s WTO obligations.

NCTO President Cass Johnson said: “While we do not know which particular subsidies USTR is planning action against, many of the subsidies cited by NCTO were of significant size, totaling in some cases hundreds of millions of dollars. Eliminating these subsidies could have a material impact on China’s ability to export goods overseas at artificially low prices.”

Johnson said the US government’s action in threatening to attack the subsidies “makes all the more important” a system of monitoring Chinese trade when safeguard quotas on some 34 “sensitive” categories of textile and apparel imports are due to expire this December 31. He noted that the last time safeguards were briefly removed, Chinese textile and apparel exports rose 600 percent, wiping out thousands of US textile jobs.

Rep. Charles Rangel, D-N.Y., chairman of the House Ways and Means Committee, has asked the US International Trade Commission to initiate an investigation that could lead to a formal monitoring program that ultimately could result in imposition of new tariffs or quotas, or both, on Chinese imports. In addition, more than 70 members of Congress have written to President George W. Bush, urging him to extend the Vietnam imports program being conducted by the Commerce Department to include Chinese imports.

October 28, 2008




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