Trade Official Sees No Need For Quotas On Chinese Textile Imports

A leading Bush administration trade official does not see any need for renewed quotas on Chinese
imports of clothing and textiles, because China is not expected to fill this year’s quotas that are
due to expire December 31.

Christopher Padilla, under secretary of commerce for international trade, said: “We have
faced calls to impose new quota restraints even though China will not even fill its existing quota
level for imports this year.” Padilla cites a number of reasons for this, including rising
production costs in China and a shift to other markets in Asia. He also noted that the value of the
yuan, China’s currency, has appreciated by about 20 percent since 2005, and that is a contributing
factor in the decrease of Chinese exports.

The US textile industry and its supporters in Congress have been pressing for a textile and
apparel imports monitoring system that could eventually lead to imposition of new tariffs or quotas
or both. One proposal would ask the Department of Commerce to establish a monitoring program
similar to the expiring program for Vietnam. That’s not very likely to happen under the Bush
administration. At the same time, the leadership of the House Ways and Means Committee has asked
the International Trade Commission to provide it with information that could lead to imposition of
trade restraints. The commission will make its first report to the committee by December 1, but no
action is expected until after the Obama administration takes office.

Meanwhile, Bush administration officials, including the president, continue to press for
approval of the Colombia Free Trade Agreement (FTA) before the end of this year. In the midst of
all of the turmoil in Congress and the administration regarding the economic stimulus package,
President George W. Bush reportedly has used the Colombian agreement as a bargaining chit in
connection with the effort to modify the stimulus package to include some aid for the ailing
automobile industry. Secretary of Commerce Carlos M. Gutierrez said in a speech last week that the
Colombia FTA and those with Panama and South Korea should be approved “with the same urgency that
we passed the economic stimulus package.” The Colombia FTA has the backing of US textile
manufacturers and importers, but it is strongly opposed by organized labor.

November 25, 2008