If we can't compete, get out of the Biz
Textile Industry Seeks Trade Limits on Chinese
By DAVID BARBOZA - NEW YORK TIMES
In another sign of how American companies are struggling in the face of China's export powerhouse, a coalition of textile and apparel industry groups asked the federal government yesterday for new protections against what it called unfair competition.
In a petition filed yesterday, the coalition pressed the Bush administration to put a cap on certain imports from China and to impose safeguards that were agreed upon when China entered the World Trade Organization.
Industry officials say a flood of cheap imports from China has forced some American textile and apparel companies out of business and led to the loss of thousands of manufacturing jobs.
"This industry is literally flat on its back, and if the government doesn't do something about it, we're going to disappear," said Cass Johnson, a spokesman for the American Textile Manufacturers Institute, an industry lobbying group in Washington.
The trade dispute is one of many that have grown out of China's entry into the World Trade Organization in 2001. The Bush administration has been seen as reluctant to antagonize China, which is now an important trading partner and a potentially important ally in the United States' dispute over nuclear capabilities in North Korea.
At a news conference in Washington, industry officials were joined by a group of mostly Republican congressmen, who also called on the Bush administration to act.
"I have long maintained that China cheats on trade agreements," Senator Lindsey Graham, Republican of South Carolina, said in a statement. "The practices of Chinese companies and the policies of the Chinese government are illegal and give them an unfair advantage in the textile market."
Most of the congressmen at the news conference were from Southern states with large textile and apparel operations that are suffering. Some of the nation's biggest textile and apparel companies, like Burlington Industries and Guilford Mills, have filed for Chapter 11 bankruptcy protection.
According to the Labor Department, about 270,000 textile and apparel workers, or about a quarter of the industry, have lost their jobs over the last two years.
Commerce Department officials said yesterday that they would review the textile industry's petition. The Commerce Department is part of an interagency group that deals with textile issues tied to the World Trade Organization. If the group determines that China violated a W.T.O. agreement, the United States could place quotas on the four products the industry wants to protect: brassieres, gloves, dress gowns and knit fabric.
"If we make a determination that there's been a market disruption, we'll put a quota in place with the Chinese," said Jim Leonard, a deputy assistant secretary of commerce and chairman of the federal interagency group that deals with textiles and apparels.
Officials in China have repeatedly disputed allegations of unfair trade in the textile market and some textile industry officials in China have threatened to call for countermeasures if the United States takes action.
Textile industry officials, however, say that China and other Asian countries are unfairly taking control of the market by keeping their currencies weak against the dollar and then dropping their prices even more to compete unfairly.
Many manufacturers in the United States complain that China has been flooding the market with underpriced goods, seeking to gain market share, and that thousands of jobs are being lost because of dumping and unfair competition.
China, which benefits from cheap labor and huge foreign investment, is now running up huge trade surpluses with the United States.
In the first five months of this year alone, for instance, China's trade surplus with the United States was $43 billion. Last year, it was $103 billion.
Since 2001, when China entered the World Trade Organization, textile officials in the United States say, China's market share in 29 textile and apparel products has jumped to 45 percent from about 9 percent.
And in the four products cited in the industry's petition yesterday ? gloves, bras, knit fabrics and dress gowns ? China's exports to the United States soared to nearly 4 billion square feet from about 484 million, according to the textile industry.
American textile officials are now asking the federal government to put safeguards into effect that China agreed to upon entering the World Trade Organization.
According to the agreement, the United States can put a cap, or quota, on Chinese imports of certain products if there is evidence that the United States market is seriously disrupted.
Quotas on the four disputed products were lifted after China joined the W.T.O. There are still quotes on other textile imports, but nearly all of them are expected to be lifted by 2005.
Officials from several different industry groups, including the National Textile Association and the American Yarn Spinners Association, say that China could gain control of 75 percent of the United States apparel market when those quotas are lifted, unless the government acts.
"We're worried that the U.S. government won't act," said Mr. Johnson at the American Textile Manufacturers Institute. "And if China does this same thing when the rest of the quotas are lifted, this industry is history."
Industry experts, though, warned that while the United States has lost manufacturing jobs and could lose even more after the quotas are lifted in 2005, the industry picture is much more complex.
David Weil, an associate professor at Boston University's School of Management and a member of the Harvard Center for Textile and Apparel Research, said the nation's textile industry remained competitive and that many of those jobs were lost to increasing efficiencies.
"I think it's an overstatement to say it's going to be wiped off the map," he said in a telephone interview. "But is it going to be more at risk post-2005? Absolutely."
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