The United States is on the way to impose quota limits on the
exports of socks from China, seeking relief similar to what the
Bush administration provided makers of three other textile products
last year.
The move could lead to new protectionism of the US textile
industry, analysts say.
The US textile industry petitioned the Bush administration on
Monday to curb the import of socks from China, saying they are
squeezed.
The US Department of Commerce now has until July 20 to decide
whether to take the case filed by four textile groups and then will
have at least three more months to conduct an investigation and
decide whether to grant the request for import relief.
The industry asked that a quota be imposed that would cap the
growth in Chinese sock imports at 7.5 percent over the next
year.
The petition by US sock makers was similar to the relief
obtained by US manufacturers of bras, dressing gowns and knit
fabric last November.
The China Chamber of Commerce of Import and Export of Textiles,
which represents the interest of the country's embattled textile
traders, said it has noticed the US move and has reminded exporters
of the importance of cushioning the likely risks.
Comments from the Ministry of Commerce, the country's trade
watchdog, were not available.
Chinese sock exporters say they are closely watching the appeal
and expressed concern over the possible US trade limits.
"Losses are inevitable if the quotas are imposed," said the
manager of a Guangdong-based sock producer which has a large
exposure to the US market.
The unnamed manager said he and his company is "reluctantly"
considering reducing the dependence on the US market.
"We just can't understand why China's cheap and good textile
products are always put under unequal treatment," he said.
The southern Guangdong
Province has already seen a slump of its exports of socks,
after the US imposed severe quality inspections in the past
months.
The province sold a total of 12.4 million pairs of socks to the
US in the first four months of the year, representing a
year-on-year decrease of 10.7 percent, local customs data
showed.
Beijing-based experts say the US appeal runs against the free
trade spirit that is enshrined by the Agreement on Textiles and
Clothing that phase out textile quotas globally, adding the move
might dampen the already friction-packed trade ties between world's
two major trading powers.
Fan Ying, a professor at China Foreign Affairs University,
cautioned the sock prices in the US might increase if the import
quotas are approved.
"It will be a loss-loss situation if the US abuses such a
special safeguard measure," she said.
According to the General Administration of Customs, China
exported a total of 770 million pairs of socks valued at 1.51
billion yuan (US$182.6 million) from January to April, an increase
of 4 per cent and 9 percent respectively.
The US move also accelerates Chinese textile exporters' concerns
that more counter-import measures will be targeted at China after
the global multi-fiber textile quotas expire in 2005.
Analysts have cautioned textile makers and exporters to remain
alert and not to be overoptimistic about the business opportunities
during a post-quota era.
"For one thing, the World Trade Organization (WTO) members are
allowed to impose special safeguard measures on Chinese textile
exports until 2008, as a condition of China's WTO entry in 2001,"
Fan said. "Safeguard measures will continue to be slapped on the
Chinese exporters."
And technical barriers will also increase even after the quota
restriction is phased out, she added.
(China Daily July 3, 2004)