US textile and clothing manufacturers have, predictably, petitioned for US textile companies to be protected against the expected surge of Chinese imports next year when the textile quota system is scrapped. Arguing that thousands of US jobs are at stake, the industry wants the administration to impose limits of 7.5 percent on the growth of Chinese products in 10 categories. In addition to this they also called for current safeguard limits, which were imposed last year on three other product lines, to be extended for another year.
“Without such safeguards, one of the largest job sectors will be destroyed,” said Cass Johnson the President of the National Council of Textile Organisations in the US. The petitions include cotton and synthetic trousers, wool trousers, cotton and synthetic knit shirts, cotton sheets, cotton yarn, shirts and underwear.
The petitions have been filed in a very politically charged atmosphere since the result of the petition is expected to be made public on November 1, only a day before the US Presidential Election. The petition also comes in the light of allegations by John Kerry that US President Bush was not doing enough to protect American workers from unfair foreign competition.
The US is currently suffering for a large trade deficit with China and the end of this appears to be nowhere in sight. The current deficit is expected to be about $140 billion for this year, up from $128 billion last year.
China has been bearing the brunt of numerous criticisms by numerous countries that are threatened by the startlingly cheap textiles and apparel emanating from the Asian giant. Some of the criticisms include the fact that that Chinese yuan is undervalued by as much as 40 percent against the dollar, due to it being pegged against the dollar at a set rate.
But a different opinion is coming from Laura Jones, the Executive Director of the US Association of Importers of Textiles and Apparel. "China is clearly not the problem for the US textile industry. The problem is the industry itself," she said. "Instead of using the 10-year quota phase-out to compete internationally, the domestic textile industry is throwing all of its energy into exerting last-minute political pressure to keep the protection they have had for 40 years".
Whether or not this is true, the spectre of losing so many jobs in the US that, according to Edgar Romney, the executive vice-president of union Unite Here, the 350 000 jobs lost in the industry since January 2001 "will pale in comparison to the jobs that will be lost in 2005 and beyond", is bound to be a major political football in the coming weeks.
If the US government finds that the petitions have merit, it will have 90 calendar days to decide whether to judge the case, which in turn means that an actual finding of threatened harm to the US industry will not come until early February, about a month after the quotas are removed.
Source: Business Report
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