U.S. to Consider Petitions Targeting China Textiles

Under fierce election-year pressures, the Bush administration said Friday that it would seriously consider U.S. manufacturers’ petitions seeking to restrain low-cost imports of Chinese textiles and apparel and would urge China to voluntarily restrict its sales to the United States.

By opening the door to complaints from domestic textile and apparel makers, the U.S. government has increased pressure on officials in Beijing to reduce trade tensions between the two countries, according to trade experts. China has resisted reining in its booming textile and apparel industry, one of its main providers of hard currency and jobs.

But the Bush administration also risks angering powerful U.S. retailers and importers, who say that predictions of a Chinese behemoth poised to destroy the U.S. textile and apparel industry are overblown. They oppose import restrictions, contending that such limits add billions of dollars to apparel prices and have not prevented American jobs from moving to lower-cost countries.

“I have to imagine there’s going to be all sorts of backroom dealing for the textile industry, at least until the election,” said Dan Ikenson, a trade analyst at the Washington-based Cato Institute, a free-trade advocate.

The spokesman for the Chinese Embassy in Washington did not respond to requests for comment.

U.S. Commerce Undersecretary Grant Aldonas, who is traveling to China next week, announced the Bush administration’s intentions in a conference call with reporters. It came a day after Sen. Ernest F. Hollings (D-S.C.) accused the Bush administration of showing “callous disregard” for one of America’s hardest-hit manufacturing sectors.

A large share of the 345,000 textile and apparel jobs lost since January 2001 have been in North and South Carolina, two states up for grabs in a hotly contested presidential election.

Democratic presidential challenger Sen. John F. Kerry of Massachusetts believes that the Bush administration should have acted much sooner to protect U.S. textile and apparel workers from unfair Chinese trade practices, campaign spokesman Phil Singer said. “Let’s just hope this isn’t too little, too late,” he said Friday.

U.S. textile and apparel makers say the protections are necessary to prevent China from taking over the world market when a global agreement restricting trade in apparel and textiles is phased out at the end of this year. At that time, the U.S. and Europe have agreed to remove the quotas that restrict imports on more than 100 categories of apparel and textiles.

Aldonas said the threat of a slew of restraints on Chinese goods had “created an opening” for negotiating a pact that would smooth the transition to a quota-free world. He said Chinese manufacturers were growing concerned about the uncertainty being created for their foreign customers, who must place orders months in advance because of transit time.

When it joined the World Trade Organization in 2002, China agreed to allow other countries to impose “safeguard” measures if their producers were threatened by Chinese imports during the first three years after quotas were removed.

If China doesn’t voluntarily curb its exports, U.S. manufacturers hope the Bush administration will impose safeguards on a wide variety of sensitive categories based on the threat of future harm rather than actual injury. They said they would file a request for safeguards on dozens of popular items such as trousers, shirts and towels by the end of this month.

Aldonas said Friday that his office would consider any credible petition that demonstrated potential harm, such as evidence that China has large amounts of unused capacity or massive inflows of investment into a particular type of production. He said he could not guarantee, however, that any protections would be in place by year’s end.

Trade experts are divided on whether such a case is legal under WTO rules.

Peter Morici, a University of Maryland business professor, said there was no precedent for this type of complaint. But, he said, the United States has valid concerns about China’s trade practices and should test the boundaries of WTO law by pressing the issue.