Successful Conclusion of China Textile Negotiations Beneficial to All Parties

The National Cotton Council (NCC) supports the efforts of the United States and China to complete a comprehensive agreement on textiles and apparel that will bring certainty and manageable growth to trade in these products through the end of 2008. 

NCC Chairman Woods Eastland stated, “This will be a difficult negotiation, but it is critical for the textile and apparel industries of both China and the United States. A comprehensive agreement will help the U.S. textile industry as it adjusts to increased competition from China and it will help China and U.S. importers by removing uncertainty in the textile and apparel trade.  We hope that an agreement that effectively manages the surges in China’s exports of sensitive textile and apparel products to the United States can be reached soon. Without such an agreement, the United States should continue to apply safeguards as warranted.” 

Eastland continued, “the use of safeguards by the United States is fully consistent with the agreement reached by China as a pre-requisite to its membership in the World Trade Organization. It is not protectionist. The safeguard authority allows growth in sensitive product categories, but helps prevent damaging surges in imports that threaten to completely swamp the U.S. textile and apparel markets. Controlling the import surges from China maintains established trading patterns with key textile industries in many developing countries.”

As textile trade negotiations continue in Beijing between the United States and China, the Committee for the Implementation of Textile Agreements announced on September 1 that it has accepted two more safeguard petitions (synthetic filament fabric (category 620) and brassieres and other body-supporting garments (category 349/649)), but also announced that it would delay until October 1 another four safeguard petitions. The negotiations were initiated to address the need for stability throughout the cotton fiber and textile sectors with the goal of the United States and China reaching an acceptable agreement on textiles that will last through 2008 -- the end of the transition period from textile quotas. The unpredictable nature of safeguard actions and the significant threat to U.S. textiles posed by surges in apparel imports from China are underlying issues the negotiators are attempting to address.

“The enactment of the Central America Free Trade Agreement also will help the U.S. textile industry compete with lower priced apparel produced in China,” Eastland stated. “It is critical that import surges from China be controlled while the U.S. builds a stronger trading relationship with the CAFTA countries. This will help the U.S. and the CAFTA countries make a successful transition to a fully quota-free market.”

By becoming a member of the WTO, China positioned itself to benefit from the worldwide lifting of quotas on trade in textiles and apparel that occurred on January 1, 2005. In order to secure that opportunity, China agreed to allow other WTO member countries to impose special textile safeguards on import surges from China during a three-year transitional period. The safeguard procedure is designed to give domestic textile industries the opportunity to adjust to this new, increased competition. They are temporary and only to be imposed if imports from China disrupt the domestic market.

The U.S. should continue the application of safeguards unless China effectively controls import surges into the U.S. market with respect to all sensitive import categories. A comprehensive agreement is the best means for an appropriate and comprehensive set of import controls. By establishing these controls, this negotiation would bring more certainty to trade in textiles and apparel, enabling all parties to effectively manage their businesses.

The NCC also continues to monitor China’s administration of tariff-rate quotas on cotton. China’s accession into the WTO provides approximately 4 million bales of market access for imports of raw fiber.