Embargoes Placed On Chinese Imports

Textile manufacturers, organized labor and the US government are continuing to use a market
disruption safeguard mechanism to limit a continuing flood of Chinese textile and apparel imports.
On July 8, the US government announced it has embargoed any further shipments this year of three
categories of Chinese apparel. Products covered by the embargo are cotton knit shirts (categories 338/339), cotton trousers (c
ategories 347/348) and underwear (categories 352/652) where import growth has been as much as 1,000 percent over 2004. The
government acted with unusual speed, as it placed the embargo on the shipments just six weeks after
safeguards on the three product categories were approved.

Commenting on the government’s speedy action, Cass Johnson, president of the National Council
of Textile Organizations, said: China was ready to ambush the US textile industry in 2005, but
timely action by the Bush administration has kept damage to a minimum. He added to his comments an
appeal for Congress to approve the Dominican Republic-Central American Free Trade Agreement
(DR-CAFTA), which is pending in the US House of Representatives, In this competitive climate, the
US textile industry not only needs strong action against [China’s] unfairly subsidized imports, but
it must also have advantageous trade agreements such as DR-CAFTA, he said.

Following the action on the embargoes, on July 11 an industry/labor coalition kept the ball
rolling on safeguards by filing five more petitions for relief. Products involved are cotton and
man-made fiber non-knit shirts (categories 341/641), other cotton and man-made fiber shirts
(categories 342/642), cotton and man-made fiber pajamas and nightwear (categories 351/651), cotton and man-made fiber swimwear (categories 359s/659s) and cotton and man-made fiber curtains (categories 369/999.

July 2005