Textile Association Supports Duties On Non-Market Countries’ Imports

The National Council of Textile Organizations (NCTO) has urged extension of the countervailing duty
law to non-market economies, such as China, charging that failure to impose such duties harms the
US textile industry. At the present time, the US Department of Commerce (DOC) has held, for a
number of reasons, that companies may not seek redress from imports from non-market economies for
what the say are unfair trade practices.

Appeals for a change by the department were triggered by an action in December, when DOC
officials agreed to look at a petition from a paper company asking for countervailing duties to be
applied to Chinese imports. The DOC has accepted the petition and has called for comments from
interested parties. If the petition is approved after public comments are reviewed, the DOC would
conduct a full-scale investigation into whether countervailing duties may be justified.

Charging that imports from China cause more harm and cost the industry more jobs than do
imports from any other country, NCTO President Cass Johnson, in a letter to the DOC, said the
department should overturn its “indefensible” policy and show leadership in defending laws designed
to prevent unfair trade practices.

In the past, the DOC has contended it cannot “unpeel subsidies” from non-market economies,
and as a result it has been unable to take countervailing duty actions against them.

“Subsidies are created to give real and tangible benefits to industries, and it seems amazing
that the United States government actually contends that it cannot arrive at a defensible
estimation of how much of a benefit a particular subsidy may deliver,” said Johnson. “The fact that
every other developed country says that they can unpeel these subsidies from non-market economies
makes such a stand indefensible.”

Johnson said China’s commitment to full and open disclosure as a member of the World Trade
Organization further weakens the US government’s position. “If China is not disclosing its
subsidies as most experts agree,” he said, “ the US government should discover them through an
intensive examination of Chinese policies.”

The US textile industry contends that China is subsidizing its exports with government
grants, low interest rates, currency manipulation, preferential tax rates and subsidized raw

January 24, 2007