Textile decree feared to cloud ties in trade
( 2003-11-20 09:13) (China Daily)
The US decision to re-impose quotas on three types of textile products from China, which has disappointed all levels of local industry, will hurt related businesses and consumers in both countries and dampen economic and trade relations between the two sides, analysts say.
On Tuesday in Washington, US Commerce Secretary Don Evans announced the US Committee for the Implementation of Textile Agreements (CITA) had decided to set quotas on Chinese imports of knit fabric, dressing gowns and bras, which he claimed "demonstrates the Bush administration's commitment to our trade rules and America's workers."
Details of the imposed quotas will be decided after negotiations between both sides.
The quotas were first eliminated when China joined the World Trade Organization (WTO) at the end of 2001.
Analysts have condemned the decision to re-introduce them, saying it will increase prices in the United States, and damage Sino-US trade relations and the liberalization of world trade.
The Chinese Ministry of Commerce has shown deep regret and firm opposition over the move.
The ministry's spokesman, Chong Quan, said China will reserve the right to protect its interests through the WTO.
Chong said both the Chinese Government and textile industry have pointed out many times that the US textile industry - in its application for quota restrictions - has failed to prove that a reduction in the demand of its products at home is being caused by Chinese imports.
Tuesday's decision did not conform to CITA's procedure on special safeguards against Chinese textiles and apparel, and the pledges contained in the working group's report on China's accession to the WTO, Chong said.
"China hopes the United States will fully recognize the negative impact the decision will have on textile trade between the two countries, and on bilateral trade and economic relations as a whole," Chong said.
"China had hoped the United States would avoid abusing the special safeguard measures."
Zhang Hanlin, president of the China Institute for WTO Studies, reiterated that the decision will hamper economic and trade links.
"It is not a matter of the goods involved, but the sentiment of the decision," Zhang said.
China has pushed continually to maintain balanced trade with the United States and vowed to expand its imports from the United States.
A purchasing delegation was sent to the United States last week, signing US$6 billion worth of contracts for products that included planes and cars.
The United States has ignored China's sincere efforts and turned an economic issue into a political matter, Zhang said.
In the wake of the decision, the US dollar has struggled at record lows against the euro and near three-year troughs versus the yen as the market worries it could signal shifts in the United States towards additional protectionist policies.
Analysts say they believe that substantial tariff hikes on foreign goods - led by rising protectionism - will probably blunt consumer spending in the United States, chilling foreign demand for some US assets as the world's biggest economy slows.
Another case illustrating the US' move toward protectionism is the WTO Appellate Body's ruling last Monday that its steel safeguards were inconsistent with WTO rules.
China's industries has urged the government to do something to hit back at the move.
Cao Xinyu, vice-chairman of the China Chamber of Commerce for the Import and Export of Textiles, said the re-imposed quotas will put the breaks on the good spirit presently being enjoyed between the Chinese and US textile sectors.
''I have met many US delegations who have been wanting to find local manufacturers in China, but the US move makes co-operation difficult,'' Cao said.
Bra prices could rise under the US decision, one of its own trade groups has warned.
J. Craig Sherman, a spokesman for the US National Retail Federation, said: "We think this is going to raise costs for retailers and raise prices for American consumers by limiting the number of Chinese products that can be brought into the United States."
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