Industry Seeks Relief From Chinese Imports

Textile and apparel trade data for January – the first month after removal of import quotas –
show a major surge in Chinese imports, triggering calls from textile manufacturer for the US
government to act immediately on a process that could result in new import quotas on Chinese
imports. Industry and labor representatives in Washington called on administration trade officials
to self initiate the so-called safeguard mechanism provided for in the Chinese Word Trade
Organization (WTO) agreement. Industry representatives and the labor union UNITE HERE have filed a
number of petitions asking for safeguard quotas based on market disruption or a threat of market
disruption. The threat approach currently is being blocked by court action in a case filed by the
United States Association of Importer of Textiles and Apparel (USAITA) .The January data show a
47-percent increase in Chinese imports in January including an increases of 1,000 percent in cotton
trousers. Other major increases were recorded in men’s, women’s, boys and girls cotton shirts and
several other categories of trousers and underwear. The data show that China has a 35-percent share
of the US import market for textiles and a 22-percent share for apparel. The overall market share
of 29-percent is the highest of any single country in history. Somewhat surprisingly, imports from
Hong Kong, Macao and Taiwan were down about 25 percent, a development that industry trade officials
say is a reflection of China’s cutting back on transshipments through those countries. Caribbean
Basin Initiative countries showed a 16-percent increase in what could be a reflection of importers
looking to nearby countries for more of their sourcing. Industry officials say that because
Januarys import numbers contain a significant amount of goods shipped from China while China was
still under quota restraints the figures are only a portent of what is to come.

As the data were released, Bruce Raynor, president of UNITE HERE, issued a statement at a
Washington news conference: Quotas have expired, imports from China are soaring, and nearly 10,000
apparel and textile workers have lost their jobs in the first 60 days of 2005. These job losses
highlight the immediate need to implement the China safeguard. The US government has the power to
act and it must do so immediately.

Claiming the Chinese import surge is just the tip of the iceberg, Auggie Tantillo, executive
director of the American Manufacturing Trade Action Coalition, said: “If history is any indication,
Chinese imports will continue to soar until they gain a virtual monopoly of the US, market. If the
US government fails to act immediately to implement the WTO safeguard, it will be an act of
reckless disregard of the available evidence, costing hundreds of thousands of US jobs as a

US government trade officials expressed their concern over the import surge and indicated they
are looking at ways to limit imports from China. Actions could range from negotiated quotas to
imposition of unilateral quotas under the safeguard provisions.

Reacting to the data, USITA said, “There is no current basis for safeguard measures whether self
initiated or by request of the U.S. industry.”

March 1, 2005