Safeguards: CITA to Consult with Industry, Congress on China Trade

The U.S. government announced Monday it would postpone its determination on six pending safeguard cases until the end of this month in order to consult with U.S. industry and Congress about whether to pursue a broader agreement with China on textile and apparel imports.

The announcement came within a month after the U.S. government stopped imports of Chinese apparel in four of the largest apparel categories, and just prior to when the United States is expected to instruct U.S. Customs to embargo Chinese goods in another two lucrative categories.

Safeguarded categories have filled at rapid-fire rates as containers of Chinese goods have been unloaded at U.S. ports in a race for the finish line before quotas levels hit their caps.

For instance, a month ago, the men's and boys' woven shirts category had not yet filled 40 percent, and now it is expected to be embargoed on Tuesday. The MMF trousers and shorts category, which was 43 percent full this time last month, was likely to be embargoed today (August 5). The man-made fiber knit shirts category took roughly seven days in July to go from 65 percent full to 100 percent full.

Below is a view of the fill levels and dates for select apparel categories under safeguard protection, based on analysis of U.S. Customs data by the trade law firm Sandler, Travis & Rosenberg P.A.

STATUS OF CHINA SAFEGUARD QUOTAS
As of 8/5/05

Category/Description Quota Units* Fill Level YTD Actual or Projected Embargo

Source: Sandler, Travis & Rosenberg P.A., http://strtap.strtrade.com

*Note: The quota period for the safeguarded socks categories ends Oct. 28. Quotas for other categories listed above are scheduled to be in place through the end of 2005.

"We look forward to working with industry and congressional leaders to get their views on the best way to ensure a level playing field," said U.S. Commerce Secretary Carlos M. Gutierrez, whose department shares responsibility for the activities of the Committee for the Implementation of Textile Agreements (CITA).

CITA has given itself until Aug. 31 to determine whether to request consultations with China regarding imports in the following categories:

*other synthetic filament fabric;
*men's and boys' wool trousers;
*cotton and man-made fiber dressing gowns and robes;
*cotton and man-made fiber brassieres;
*knit fabric; and
*cotton and man-made fiber sweaters.

If CITA decides to requests consultations with China about trade in these categories, it will automatically start safeguard quotas on the categories.

While it has delayed safeguard activities on these categories, CITA is moving forward in considering safeguard action for the following categories in response to industry petitions:

*cotton, wool and man-made fiber socks;
*women's and girls' cotton and man-made fiber woven shirts;
*cotton and man-made fiber skirts;
*cotton and man-made fiber nightwear; and
*cotton and man-made fiber swimwear.

Stephen Lamar, senior vice president of legislative and public affairs for the American Apparel & Footwear Association (AAFA), said there are some signs of the "stars aligning" for the United States and China to work toward an agreement, but that he was uncertain how quickly talks would progress. He said meetings may start in the next couple of weeks.

AAFA is gathering feedback from its members about what would be in their best interests in a potential U.S.-China textile and apparel trade agreement. Lamar said it was too soon for the association to comment on specific parameters it would like to see in such an agreement.

"We are pleased that the U.S. government has accepted additional cases for review. However, the only good excuse for delaying decisions on the products where decisions were due is if the U.S. government is able to negotiate a fair, comprehensive textile and apparel agreement with China in short order," said Auggie Tantillo, executive director of the American Manufacturing Trade Action Coalition (AMTAC), one of four associations responsible for filing safeguard petitions this year.

"A fair comprehensive agreement would cover all categories where safeguard petitions have been filed or approved. It should also include any categories where safeguards have not been filed that are disrupted or that are facing imminent disruption," said Tantillo. "A fair deal would limit the growth of Chinese imports to very close to 7.5 percent and should last through the end of 2008. Finally, any fair deal also would include no promises not to extend the safeguard during current the Doha Round of WTO negotiations and fair and tough penalties on Chinese quota limits if companies are caught illegally transshipping."

KATHLEEN DESMARTEAU is editor in chief of Apparel and may be reached at 864-627-0276 or [email protected].

For More Information

To join the WTO, which it did in December 2001, China agreed that the United States and other WTO member countries could limit the importation of Chinese apparel and textiles by category if there was a market disruption threatening to impede the orderly development of trade.

Here are some Apparel articles that have tracked the safeguard subject in recent months:

Some China Safeguard Quotas Almost Full
Like the last few grains of sand to pass through the hourglass, time is running short for Chinese imports to clear U.S. Customs in some of the fastest-filling safeguarded categories.
http://www.apparelmag.com/articles/viewpoints/fyi070805.shtml

U.S. Government to Invoke China Safeguards on 13 Products
Some of Flagged Categories Could Fill in Third Quarter
http://www.apparelmag.com/articles/features/feature051805.shtml

China Safeguards Update: Threat-based Petitions Back on the Table
An appeals court cleared the way for the U.S. government to recommence its consideration of 12 threat-based China safeguard petitions. The government also launched seven new safeguard investigations.
http://www.apparelmag.com/articles/features/feature042805.shtml

U.S. Intensifies Political Focus on Chinese Trade
Safeguard Investigations Underway, Currency-Related Bills Introduced
http://www.apparelmag.com/articles/features/feature041405.shtml

U.S. Government Self-Initiates Safeguard Investigation in Six Categories
Associations to File Safeguard Petitions in 14 More Categories
http://www.apparelmag.com/articles/features/feature040605.shtml