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Restrictions on Chinese textile harm US
Updated: 2005-06-07 14:16

"Restrictions on imports from China are harmful to American consumers. They drive up the price of clothing and textiles without really helping our domestic industry," Pam Slater, executive director of Consumers for World Trade (CWT), told Xinhua in a recent interview.

The US government announced twice in May that it decided to impose new limits on the import of some clothing and other textile products from China.

The new limit on the Chinese products came less than five months after the elimination of the world quota system on textile trade from January 1, 2005.

US Commerce Secretary Carlos Gutierrez said that the new limit US "demonstrates the administration's continued commitment to America's textile manufacturers and their employees."

However, the past several decades have shown that the protection of the US textile industry has resulted in an effect contrary to the goals of the US government. About one million jobs were lost in the past dozen years in the US textile industry although the industry has been the most protected in the country.

Meanwhile, the decision to abolish the quota system on world textile trade was made about ten years ago and the US textile industry has had enough time to prepare itself for the new environment in 2005. However, it seems that it has done very little to train itself to be more competitive in the world textile trade and the only thing it can do in order to meet its challenges is to ask for new and more protection from the government.

"The American textile industry has continued to lose jobs in spite of several decades of protection. Clearly, quotas, tariffs and other forms of import restraints are not working to save our industry," Pam Slater said.

At the same time, US consumers have been greatly harmed by the government's protectionist policies on the textile and clothing trade.

If asked what is covered by the US$45 one consumer paid in the United States for a wool sweater imported from China, one may say it includes the cost of the yarn, dyes and labor used to make the sweater, as well as costs related to selling it.

What one probably doesn't know is that he or she also paid a tidy sum for protectionism -- a tariff and "quota cost" resulting from a government-imposed limit on the number of sweaters the US could import, CWT said in a research report. In fact, that protectionism represents quite a large chunk of the US$45 American consumers paid for the sweater. Even if the sweater was labeled "Made in the USA," its price was higher because of protectionism.

Aron Schavey, a policy analyst in the US Center for International Trade and Economics, also found in his report a few years ago that, because the US government sets annual quotas for the number of imported China-made sweaters, the cost of each sweater has been raised by about US$12, increasing the wholesale price by 38 percent.

For example, the wholesale price of a China-made sweater was about US$44 in the US market, it included the production costs of US$26, 6 in tariffs and US$12 of "quota costs." The US consumers would only have to pay US$32 for one sweater if the quotas were removed.

A CWT report said that the average US household spends US$1,793 on apparel and accessories each year, while the hidden "Protection Tax" accounts for about US$226. US consumers would save an estimated US$24.4 billion each year if the textile quotas or limitations imposed by the government were removed.

"The US Government should allow free trade in textiles and apparel with China and other countries, while helping those Americans working in the textile industry to find jobs in other, more competitive industries," Pam Slater said. "This is what is in the best long-term interests of Americans."

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