I have been expecting this to happen. Right move from a Political and FA viewpoint. Wrong move from an economic one.
November 18, 2003
White House Moves to Impose Quotas on Chinese Textiles
By EDMUND L. ANDREWS New York Times
WASHINGTON, Nov. 18 — The Bush Administration moved today to block large volumes of Chinese textile exports to the United States, provoking fears of protectionism in international markets but cheers from American producers in the southern United States.
Invoking special "safeguard" clauses in its trade agreements with China, the Commerce Department said it would begin discussions to impose new quotas that could sharply cut back China's burgeoning exports of knit fabrics and other products.
Industry executives said that the three categories of textiles cover many millions of dollars in imports, but that they are probably more important as test cases in a broader assault against Chinese clothing and textiles of all sorts.
Administration officials made it clear they wanted to send Chinese leaders a signal that they want broader cooperation on a wide range of complaints over Chinese trade practices. But the move also seemed an effort to soothe a growing push from both parties in Congress for tough new tariffs against all Chinese products.
The decision today came as President Bush continued to wrestle with an equally explosive decision over whether to keep protecting American steel producers with their own set of "safeguard" tariffs. The World Trade Organization has ruled that the American tariffs violate international trade laws, and the European Union is threatening to impose $2.2 billion in retaliatory tariffs as early as next month.
Today, American steel producers let it be known they would be willing to abandon the special tariffs about six months earlier than they would have been required to do, but European officials dismissed the idea out of hand.
In steel as well as in textiles, President Bush has been willing to compromise on his oft-stated goal of promoting global free trade and he has been under great pressure to stem the huge loss of manufacturing jobs — many occurring in politically important states like Pennsylvania, Ohio and North Carolina — over the past two years.
"This decision demonstrates the Bush administration's commitment to our trade rules and America's workers," Commerce Secretary Donald L. Evans said in a statement accompanying today's decision. "I believe this will advance our future dealings with China, for no market operates fairly without open dialogue."
The Bush administration has been pressuring China on several fronts for several months now, but it has also fought all proposals in Congress to impose tariffs in response to what many lawmakers contend is China's policy of intentionally undervaluing its currency, the yuan. Critics have complained that China has kept its currency artificially low in relation to the dollar, thereby making its exports cheap in the United States.
Even as the Commerce Department threatened to start blocking Chinese textile imports, it was also holding the first of several workshops in Newark and New York aimed at encouraging American companies to invest in China.
Today's decision had been actively sought by a number of the biggest American textile companies, including Milliken & Company. Under provisions of the treaty that opened trade between China and the United States, the United States is allowed to restrict the growth of certain "sensitive" categories of imports to 7.5 percent a year.
nytimes.com |
