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OPERATIONS

Chinese Imports Flood Apparel Market

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April 5, 2005 -- Domestic textile businesses are urging the Bush Administration to initiate safeguards immediately to protect local manufacturers from being swept away by Chinese imports that are flooding American markets since more than three decades of quotas ended on Jan. 1, 2005.

The safeguards would limit the soaring exports from China that are driving down apparel prices in the country, benefiting consumers but killing many local businesses, said the American Manufacturing Trade Action Coalition (AMTAC).

The World Trade Organization agreement offers the U.S. and other countries the power to restore quotas, called government safeguards, if Chinese imports become disruptive to the domestic industry.

"The data shows that China's surge is no one-month anomaly," said American Executive Director Auggie Tantillo. "Already 17,200 U.S. textile and apparel manufacturing jobs have been lost in 2005. These job losses will be just the tip of the iceberg."

The largest export increases to the U.S. were in cotton knit shirts and trousers, which were up 2,120% and 1,398% respectively. Chinese prices are down 31% on major products including underwear, cotton shirts, man-made fiber trousers, and wool and cotton trousers, since the beginning of the year.

The safeguards would limit Chinese imports in key categories to just 7.5% more than the shipments of those goods during the previous 12 months, at the time the safeguard was imposed.

The provision means that the government needs to act on the issue as soon as possible since the baseline considered for the imposition of the safeguards is constantly dropping, said AMTAC.

According to the preliminary data for textiles and apparel released by the U.S. Government shows total imports from China have increased 63% to more than 2.8 billion square meters for the first quarter of 2005 compared to the first quarter of 2004.

China's share of the U.S. import market in the apparel categories released from quota on January 1, 2002, jumped from less than 10% to more than 70% in less than three years, said the AMTAC.

The expansion of the Chinese market share has come at the cost of American jobs, said the coalition.

Since January 2001, U.S. textile and apparel employment has fallen from 1,047,200 to 665,900 as of March 2005. The loss of 381,300 jobs represents 36.4% of the January 2001 workforce, the coalition said.

The industry applied for the safeguards in 20 categories in October 2004 but retailers and importers persuaded the courts to block the government from considering the request.

"The domestic industry has been complaining since 1994 and this is just another instance," said Brenda Jacob, Washington Trade Counsel for the United States Association of Importers of Textiles and Apparel. "Removal of quotas benefits retailers because they can make a selection based on who has the cheapest prices and the best product rather than who has the quotas."

Last updated: Apr 5, 2005




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