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Trade quotas don't help
By Xin Bei (China Daily)
Updated: 2004-02-24 16:23

The changing terms of international trade require new business strategies for all sides.

It was reported that the United States is now implementing import quotas on Chinese clothing.

The new import quotas will limit the increase of China's shipments of brassieres, knit fabrics and dressing gowns to the United States to 7.5 per cent above totals for the last year or so.

As a first-step protectionist measure against China, the US move surely does not augur well for Chinese exporters.

Yet there is no need to worry too much about it since it puts a cap on merely a small part of total Chinese textile and apparel exports to the United States.

Moreover, under international trade agreements, the United States is required to end all textile and apparel import quotas by January 2005.

The one-year import quotas are unlikely to deal a fatal blow to China's competitive exporters, but still the changed trade situations should be a cause of great concern for both countries.

Globalization and trade liberalization have made it necessary for every country to adjust its division of labour more in line with its comparative advantages.

Trade protectionism is by no means the right answer to saving domestic jobs.

It is true that the US economy was shedding manufacturing jobs in recent years. But protectionist trade policy will not help sharpen American workers' competitive edge in the global market.

The elimination of all discriminatory measures by 2005 will profoundly alter the rules of the game to which textile and clothing companies have adapted their strategies.

Clearly, it is high time for US companies to adopt business plans based on the new market situation instead of protectionist trade policies.

For Chinese exporters, import quotas sound the alarm for vicious competition among themselves which has led to an astronomical surge in China's shipments of clothing to the United States in recent months.

As an increasingly important force in international trade, Chinese exporters should refrain from undercutting each other to vie for foreign orders.

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