China Blocks Discussion Of Import Impact

In an escalating trade war, the Chinese government has blocked an attempt by textile-importing
nations to have a World Trade Organization (WTO) World committee discuss the impact of the removal
of textile and apparel import quotas. The issue was on the agenda for the May meeting of the WTO
Council on Trade and Goods (CTG), but when China objected to considering an appeal from Tunisia,
the meeting was cancelled.

Trade associations from the United States and 54 other countries had succeeded in getting the
textile issue on the CTG’s agenda, hoping that a discussion of problems resulting from the quota
removal would eventually result in some actions to alleviate problems being experienced in the
United States and other importing countries. When the issue was raised, Tunisia, Jordan and Turkey
insisted that it should not be removed from the agenda, and when China persisted, the meeting was

Speaking on behalf of the 96 trade groups that comprise the Global Alliance for Fair Textile
Trade, Cass Johnson, president of the National Council of Textile Organizations, commended Tunisia,
Turkey and Jordan for resisting the effort by China and a few other countries, saying that the US
textile and apparel market is in a critical crisis, adding that without a timely and comprehensive
WTO resolution to the crisis associated with the removal of textile quotas, millions of textile and
apparel jobs will be lost to the predatory practices of a handful of countries.

Auggie Tantillo, executive director the American Manufacturing Trade Action Coalition, said US
imports of textiles and apparel from China are up by 63.7 percent for the first four months of
2005, and if that trend continues, Chinese imports could increase from 25 to 40 percent of the US
market. European Union textile association officials also said Chinese imports are at record
levels. The next meeting of the CTG is not scheduled until at least July.

May 2005