End of Textile and Apparel Quotas May Lead to New Import Restrictions
for Select Countries
2004 to Mark End of Restrictions Regulating Textile Trade
By Philippe Bruno, Greenberg
Traurig, Washington, D.C. Office
View or download the PDF version of this Alert.
As of December 31, 2004, all quotas currently in place concerning textile
products and apparels will end. This means that foreign exporters and U.S.
importers will be free to export or import any textile products or apparels
at any time into the United States without having to worry about quantitative
limitations, import licenses and other special requirements. In theory,
this is good news for companies that import textile products, as after decades
of restrictions, the textile trade will finally be liberalized.
|"In practice, however, a
trade war is lurking at the horizon not only in the United
States but in Europe and in any other countries whose textile
manufacturing industry may be vulnerable to rising imports from
lower-cost exporting countries."
In practice, however, a trade war is lurking at the horizon not only
in the United States but in Europe and in any other countries whose textile
manufacturing industry may be vulnerable to rising imports from lower-cost
exporting countries. For example, the National Council of Textile Organizations
(NCTO) released a study on September 1, 2004 revealing that China has captured
72 percent of the U.S. import market in the 29 textile and apparel categories,
as of June 2004, compared to 10 percent in 2001. These numbers may rise
even higher after 2005.
In the United States, the textile manufacturing lobby has been very active
and a number of actions are being prepared to stop what some view as an
onslaught of imports into the U.S. after January 1, 2005. China is the primary
target of these efforts. In fact, three U.S. textile trade associations
- the American Manufacturing Trade Action Coalition (AMTAC), the National
Council of Textile Organizations (NCTO), and the National Textile Association
(NTA) - revealed on Tuesday, September 1 that they will seek to reinstall
import restrictions on numerous categories of Chinese textile and apparel
imports. The associations said they will file their petitions by mid-to-late
September. Last year, textile groups successfully petitioned for quotas
on imports of Chinese brassieres, robes and knit fabric. This time textile
groups will likely target shirts, trousers, undergarments, and household
items such as towels and sheets.
The Committee for the Implementation of Textile Agreements (CITA), the
interagency group chaired by the Commerce Department that hears the petitions,
previously said it would only consider petitions under the China textile
safeguard based on actual market disruption, rather than the threat of such
disruption. But Auggie Tantillo, executive director of AMTAC, said the industry
has received assurances that CITA will not directly reject “threat” petitions:
“We have confirmed with the U.S. government that we are well within our
rights to file cases based purely on threat.”
Cass Johnson, president of NCTO, said that by filing the petitions prior
to October 1, the groups may have the restrictions imposed by the middle
of January, 2005. Imports from China would then be limited to 7.5 percent
above current trade until the end of 2005.
Officials at the Department of Commerce and the Office of the U.S. Trade
Representative would not comment directly on the petitions. “We review every
petition received very carefully and make our decisions on a case-by-case
basis,” said Department of Commerce spokeswoman Mary Brown Brewer.
It is likely that other countries with large, low-cost industries, particularly
in Asia and Central America, may be targeted as well in the future in addition
to China. As a result, the liberalization of trade in textiles and apparels
may create both problems and opportunities for foreign exporters and U.S.
importers. The targeted countries will face problems with the possible reinstatement
of import restrictions, but non-targeted countries may be able to take advantage
of the disruption caused by trade actions against the targeted countries
by increasing exports.
The Global Trade Practice Group is closely monitoring the developments
in this area for a number of current clients. We provide technical and strategic
assistance to our clients. We provide technical assistance in connection
with the trade remedy actions that are being prepared and will be filed
in the coming weeks, and strategic assistance in identifying the potential
targets of these actions and taking protective measures.
© 2004 Greenberg Traurig
For more information, please review our Global Trade Practice description, or
feel free to contact one of our attorneys.
This GT ALERT is issued for informational purposes only and is not intended
to be construed or used as general legal advice. Greenberg Traurig attorneys provide
practical, result-oriented strategies and solutions tailored to meet our clients’
individual legal needs.