China Safeguard Restraints Remain In Effect

The first action taken by the US government to restrain the growth of Chinese imports will likely
remain in effect for the remainder of this year, as the 90-day period for bi-lateral consultations
on the issue has expired. The US has placed a 7.5-percent growth rate cap on imports of knit
fabric, dressing gowns and brassieres under the so-called safeguard provisions in the US-China
bilateral textile agreement, which permits the imposition of quotas where it can be demonstrated
that there is market disruption. After quotas were removed from the products in question in 2001,
imports surged, and the American Manufacturing Trade Action Coalition (AMTAC) and others filed a
petition with the US government seeking relief. The interagency Committee for the Implementation of
Textile Agreements ruled in favor of the textile industry last Nov. 18, and the time clock was
started on a 90-day consultation period, but there was no agreement from the Chinese.

AMTAC Washington Coordinator Augie Tantillo said that while his organization was pleased with
the action, it would like to see a comprehensive agreement that would limit the growth of all
sensitive textile and apparel exports to levels that would not disrupt the US market in the future.
Since that is not likely to happen, the US industry can be expected to chip away at the problem by
filing additional safeguard petitions when it believes it can be demonstrated that additional
products are disrupting or threatening to disrupt US markets. Retailers and other importers of
textiles and apparel were strongly opposed to the safeguard petitions, as they said they were based
on politics rather than documented evidence of disruption.

April 2004