TRALAC - Trade Law Centre

International textile groups urge US government to monitor chinese apparel exports

Monday, 15 September 2008

Textile and apparel groups from 17 countries sent letters on Friday urging Congressional leaders to support, and the Bush Administration to extend, the Textile Monitoring Program (TMP) to China once the remaining textile and apparel safeguards are removed on January 1st, 2009.

The trade association groups which signed the letters represent over one million textile and apparel workers in Africa, Asia and South and North America whose livelihoods are threatened by the removal of the safeguards and a likely surge of dumped Chinese apparel products.

Textile and apparel groups from the following 17 countries signed the letter: Colombia, Costa Rica, the Dominican Republic, Ecuador, El Salvador, Ethiopia, Honduras, Kenya, Lesotho, Madagascar, Mauritius, Mexico, Nicaragua, Peru, Philippines, South Africa and the United States.

The groups cited the following reasons for making the request:

Since 2001, the Chinese share of the U.S. apparel market has increased from an estimated 15 percent to 60 percent in those categories where quotas have been removed. Chinese exports of textiles and apparel to the United States have increased by $25.5 billion since 2001, from $6.5 billion to $32 billion, a nearly 400 percent increase. As a result, hundreds of thousands of jobs in developing and least developed countries have been lost.

When quotas on the current products under safeguard were briefly removed in 2005, Chinese manufacturers dropped prices by 40 percent and increased exports by 600 percent. This enormous surge triggered the imposition of the safeguards that are now scheduled to expire on January 1st, 2009.

Since the European Union removed its safeguards on January 1st, 2008, Chinese exports have increased by 34 percent in apparel categories that were previously under safeguard. Prices in some categories have fallen by as much as 44 percent.

China announced last month that it was increasing subsidization of its textile sector by hiking the export tax rebate for textiles. China also said it would be increasing other subsidies for the industry. According to U.S. government sources, the Chinese government already gives its textile and apparel sector 63 subsidies, including many which are WTO illegal.

The current TMP was put into place after Vietnam, another non-market economy country with a state run textile sector, was removed from quotas in 2006. Under the monitoring program, the U.S. government reviews preliminary import data on a monthly basis in selected categories and, if evidence of dumping is found, the government will self-initiate a dumping investigation. The current program is scheduled to end in January 2009.

For more information, contact:

Africa:

Jas Bedi

Chairman, KAM (Kenya Association of Manufacturers) Textile Sector

Chairman, KAMEA (Kenya Apparel Manufacturers Exporters Association)

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+254 (20) 556-114

Latin America:

Juan Antonio Reus

Director General

CANAINTEX (Ca¡mara Nacional de la Industria Textil de Mexico)

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52 55 52808637 Ext 1002

United States:

Cass Johnson

President

NCTO (National Council of Textile Organizations)

Washington, DC

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(202) 822-8025