Textile

China opposes U.S. clothing safeguardsSat May 14, 2005 08:58 AM ET By John Ruwitch
BEIJING (Reuters) - China said on Saturday it opposed a U.S. decision to restrict booming imports of Chinese trousers, shirts and underwear, saying the move violates World Trade Organization agreements and urged Washington to reconsider.
China reserved the right to adopt measures within the WTO framework, Commerce Ministry spokesman Chong Quan was quoted as saying in a statement on the ministry's Web site, www.mofcom.gov.cn. It gave no details.
U.S. Commerce Secretary Carlos Gutierrez said on Friday the United States would restrict imports of the three kinds of clothing from China that have surged dramatically since the beginning of the year unless the two countries work out a compromise.
The decision flowed from three investigations the Bush administration launched last month, and Gutierrez said it showed the administration's commitment to leveling the playing field for U.S. industries.
Preliminary U.S. figures suggest imports of cotton trousers from China have increased around 15 fold in just four months.
The European Union is also considering curbs on Chinese clothing imports following dramatic increases.
But Chong said China's exports of the three kinds of clothing have not caused disorder in the U.S. market and the U.S. move "violates WTO agreements on textiles and clothing and deviates from the spirit of the WTO's advocacy of trade liberalisation."
The decision would damage the interests of Chinese companies and "seriously blunt the confidence of Chinese people and industries in the international trade environment since China jonied the WTO," he said.
"The Chinese government reserves the right within the framework of the WTO to take further measures," he said without elaborating.
He urged the United States to "correct its erroneous measure."
QUOTAS
The quotas on billions of dollars of clothing imports will take effect from the day that the United States formally requests consultations with China, which is expected by the end of this month.
Washington and Beijing will have 120 days to find a solution. If the talks fail, the quotas will remain in place until the end of the year, the Commerce Department said.
The Bush administration has been under tremendous pressure to curb a trade deficit with China that reached a record $162 billion last year.
A WTO rule allows members to restrict growth in clothing imports from China to 7.5 percent above the previous year's level when there is a surge. Beijing accepted that as a term of its entry into the WTO.
Domestic textile groups hailed the Bush administration decision, which they have urged for months, but U.S. retailers condemned the action and accused the Bush administration of ignoring their concerns.
The government is also considering action in other clothing categories following petitions filed by the industry. It will make a decision in those cases "as expeditiously as possible," the Commerce Department said.
Preliminary U.S. data showed a 1,505 percent increase in imports of cotton trousers from China in the first four months of 2005, and increases of 1,346 percent for cotton shirts and 347 percent for cotton and synthetic underwear.
The sharp increases followed the end of a decades-old international quota system on Jan. 1, which allowed China to edge out other foreign suppliers. (Additional reporting by Doug Palmer in Washington)
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