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US should safeguard global textile integration
Updated: 2005-05-16 22:42

Chinese Premier Wen Jiabao and textile industry experts on Monday urged the United States to safeguard global textile integration, saying its recent decision to impose restrictions on Chinese textile exports is a serious threat to the multi-lateral trading system.

During his meeting with a US Chamber of Commerce delegation in Beijing, Wen said the US restrictions were "not good" for the sound development of Sino-US trade relations. "China and the United States should proceed from the long-term perspective and work together to safeguard global textile integration, a major progress made in the world's multi-lateral trading system," he said.

US Secretary of Commerce Carlos Gutierrez announced Friday thatthe US government has decided to re-impose quotas on Chinese-made cotton trousers, cotton knit shirts and underwear.

The decision made by the Committee for the Implementation of Textile Agreements means that the quantity of these apparel goods China can export to the United States will be limited to an increase of just 7.5 percent this year, compared to shipments over a 12-month base period.

Chinese Ministry of Commerce spokesman Chong Quan responded Saturday, saying the move "runs counter to the World Trade Organization's agreements on trade of textile and apparel products as well as the WTO spirit of free trade."

Outraged by the "hasty, unwise" US decision, Chinese textile industry specialists and international trade experts said on Monday the US restrictions are detrimental to both China and the United States.

The China Textile Industry Association said the restriction is detrimental to China's textile industry because it may have to lay off 100,000 textile workers a year and its investment environment will be undermined.

Even to the United States itself, the restriction does more harm than good, said Gao Yong, the association's vice president, in a telephone interview with Xinhua. "The US decision to restrict imports of Chinese garments impairs the interests of US consumers and retailers who have benefited a lot from cost-effective Chinese goods."

US retailers are already complaining that the new limits on Chinese imports, and more that are expected to be imposed on other clothing categories, will simply mean higher prices for American consumers.

The US restriction measure does little to help the ailing US textile manufacturing industry, which has been suffering from recession even before China entered the World Trade Organization in 2001, said Wang Hongxia, a research fellow with the Chinese Ministry of Commerce (MOC).

"Some US investors in China will also suffer from its consequence because many products from their China facilities are exported back to the United States, too," said Wang, a specialist on Sino-US trade relations with the MOC's Institute of International Trade and Economic Cooperation.

Textile firms in east China's Shandong Province, for example, imported 465,000 tons of cotton throughout 2004, 182,000 tons of which came from the United States. The US restriction on Chinese textile exports is like cutting cotton imports, which would affect the US cotton growers and exporters, said an official in charge of foreign trade who declined to be named.

It's quite normal for China's textile exports to grow followingthe end of the global quota regime, but industry insiders say the growth rate will slow down in the second half of the year. "In fact, the growth rate of textile and garments exports in March already fell five percent year-on-year to 19 percent," said Zhang Yankai, deputy president of the textile sub-council of the China Council for the Promotion of International Trade (CCPIT).

"China's textile and apparel exports, therefore, will not disrupt the US market," Zhang told a roundtable of the China-US Business Dialogue held by CCPIT and the US Chamber of Commerce in Beijing Monday.

Some claim it is also unfair for the United States to overestimate the threat of China's exports with only three months' figures. "It's the US own rule," said Dr. Jiang Haihong, a WTO affairs specialist with the Shanghai-based Consulting Center for WTO Affairs. "The WTO rule requires figures from at least 12 months to decide whether exports from another country have actually disrupted the market order of the importing economy."

The trend of economic globalization is irreversible, said Gao Yong, vice president of China Textile Industry Association. "It's only natural for more garments and other labor-intensive products to be manufactured in regions where overall costs for production are lower."

To tackle the new challenges, Gao said his association will step up training of domestic textile exporters on world trade laws as well as on ways to solve friction and protect themselves.

"Chinese firms also need to improve quality and services and establish more world-renowned brand names to sharpen their competitive edge in the international market," he said.

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