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Trade groups in race for China safeguards

WASHINGTON, D.C. — Fifty days before the scheduled lifting of import quotas, a coalition of trade groups this morning said it has filed the first of 10 threat-based safeguard petitions — including one covering cotton sheets — with the Bush Administration in an attempt to limit the expected impact of Chinese goods entering the United States next year.

The petitions cover 15 of the 91 product categories set to have import quotas eliminated Jan. 1. Most of those are apparel related, but several include cotton sheets, synthetic filament fabric and cotton yarns. The group also said it expected to file three additional petitions shortly in an effort to renew safeguards implemented by the United States last December, including one for knit fabrics. Still more may be in the offing.

The petitions cover nearly $2 billion in U.S. textiles and clothing imports, according to the group, including 13.8 percent of the $14.2 billion in Chinese imports entering the country last year.

The group complained that the lifting of the quotas as scheduled, and under the present circumstances, will create unfair competition instead of free trade.

“This is happening in manufacturing sector after manufacturing sector around the world where we see all the investment going to China because it offers the lowest prices, and that’s almost entirely because it practices unfair trade,” said Cass Johnson, president of the National Council of Textile Organizations. “It manipulates currency, its banks provide non-performing loans, it pours billions of dollars into state-owned enterprises, it grants free or reduced utilities, shipping and property taxes to its exporters,” among many other benefits.

The petitions are being filed with the Committee for the Implementation of Textile Agreements (CITA), a five-member U.S. government interagency group, including the U.S. Department of Commerce. At least three of the five member agencies must vote to approve the safeguards for any to take effect. The committee has 15 days to accept or reject the petitions based on technical merit, a time frame that will take the decision on the first petitions to the period immediately around election day.

If approved, the final decisions by CITA could come in mid to late January; two to four weeks after quotas are removed.

And, if they receive a favorable ruling, it could bring China back to the negotiating table. If not, the United States could limit Chinese exports in the safeguard categories to a 7.5 percent growth ceiling.

In the safeguards enacted last year, China declined to return to the negotiating table.

The trade coalition consists of the American Manufacturing Trade Action Coalition, The National Council of Trade Organizations, the National Textile Association, The National Association for the Sewn Products Industry, The National Cotton Council, the American Fiber Manufacturers Association and the labor union, Unite Here!

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