Court Orders Stop Of China Petitions

Michele SanFilippo, January 10, 2005

New York — The U.S. Court of International Trade, a federal district court based here, ordered the Bush administration to stop consideration of new restrictions on textiles and apparel imports from China, effective late Dec. 30.

This preliminary injunction issued by Senior Judge Richard Goldberg came in response to a lawsuit filed by the U.S. Association of Importers of Textiles and Apparel (USA-ITA), a trade group representing U.S. importers and retailers of textile/apparel products.

“This is an extremely important step toward ensuring that the rights of American companies are protected,” responded Laura Jones, executive director of USA-ITA. “The court is acknowledging that the government's actions are causing irreparable harm to our members. Now, further harm can be prevented.”

Under the terms of the injunction, the Bush administration is prohibited from accepting, considering or taking any further action on China textiles safeguard petitions, according to the procedures established in 2003 based on threat of market disruption.

The government is also prohibited from self-initiating consideration of any safeguards on the basis of threat, pending resolution of other issues raised by the USA-ITA lawsuit. Those issues include whether the Committee for the Implementation of Textile Agreements (CITA — a U.S. Government interagency body) is subject to the requirements of the Administrative Procedures Act, which mandates advance notice of any changes in federal regulations as well as the opportunity to comment on proposed changes in rules before implementation.

This temporary injunction has bolstered USA-ITA's optimism on the outcome of its lawsuit. “We have no doubt that we will prevail in this case,” said Jones. “We look forward to a ruling by the court that CITA has to follow its own rules and has to give importers and retailers a real opportunity to participate in the rulemaking process.”

USA-ITA sued the government on Dec. 1 for a lack of due process in its consideration of possible safeguards against products from China. It charged that the five agencies comprising CITA wrongly accepted requests from domestic textiles industry groups to re-impose quotas on products from China before the U.S. government's own rules allowed consideration of those requests, and in doing so violated the law.

Meanwhile, AMTAC believes the safeguard process was wrongly stopped and that it is imperative that the government appeal this “flawed” decision as soon as possible. According to a coalition statement, “AMTAC hopes that the appellate process be expeditious so that the U.S. government's consideration of the threat-based petitions already filed will not be delayed.”

The statement continued: “This ruling could open the door to allowing China to gain a monopoly share of the U.S. textile and apparel market, in short order, threatening the economic livelihood of nearly 700,000 U.S. textile and apparel manufacturing workers in the United States. Undeniably, China poses an overwhelming threat to global textile and apparel markets. It is specifically for this reason, that the terms of China's WTO accession agreement allow safeguard actions to prevent massive market disruption and job loss. The terms of the agreement are so clear that other countries, such as Argentina, Mexico and Turkey, have already implemented threat-based safeguard measures against China to prevent damage to their textile and apparel industries.”

According to AMTAC, this far-reaching injunction suggests that the U.S. Court of International Trade is prepared to overturn decades of legal precedent and undermine the Executive Branch's authority to administer and interpret trade agreements. The Executive Branch's rulemaking and interpretation of trade agreements is exempt from the Administrative Procedure Act when it exercises its foreign affairs exemption as was done for CITA. The ruling in this case will overturn CITA's ability to interpret trade agreements like China's accession agreement to the WTO.

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