Safeguards on Textile and Apparel Imports from China (CRS Report for Congress)
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| Release Date |
Revised June 30, 2006 |
| Report Number |
RL32168 |
| Report Type |
Report |
| Authors |
Vivian C. Jones, Foreign Affairs, Defense, and Trade Division |
| Source Agency |
Congressional Research Service |
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Summary:
Textile and apparel import data issued in June 2006 indicated that from January-April 2006, the
volume of U.S. imports from China grew by 4.84% compared to the same time period in 2005. The
volume of U.S. imports from the world grew by 1.06% during the period.
U.S. textile and apparel production has been steadily declining, and imports from all countries
have been increasing. However, U.S. imports from China have been growing at a much faster rate.
The expiration of textile and apparel quotas on January 1, 2005, led to U.S. industry concerns that
Chinese imports will capture the domestic market share in many product categories. Many
developing nations that received access to U.S. and other developed country markets through the
quota regime are also concerned that the end of quotas will lead to a global consolidation of textile
and apparel production in which only a few nations, including China, India, and Pakistan, will
benefit. In contrast, retailers and other importers of textiles and apparel have long opposed quotas
because they believe that they cause market inefficiencies that result in higher prices to U.S.
consumers than would otherwise be the case.
A textile-specific safeguard measure in China's World Trade Organization (WTO) accession
agreement allows the United States and other Member countries to impose import quotas on textile
and apparel imports from China if they determine that Chinese-origin imports of the targeted
products are causing "market disruption." Between December 2003 and late October 2005, the
Committee for the Implementation of Textile Agreements (CITA) formally requested consultations
with China -- and simultaneously implemented quotas -- on cotton knit shirts and blouses
(Multi-Fiber Arrangement (MFA) categories 338/338); cotton trousers (categories 347/348); cotton
and man-made fiber underwear (categories 352/652); cotton yarn (category 301); men's and boys
cotton and man-made fiber shirts, not knit (categories 340/640); man-made fiber knit shirts and
blouses (categories 638/639); and man-made fiber trousers (category 647/648). U.S. producers
vowed to continue filing safeguard petitions with the hope of pushing forward a more comprehensive
agreement establishing quantitative limits on Chinese imports.
On November 8, 2005, then-U.S. Trade Representative (USTR) Rob Portman and Chinese
Commerce Minister Bo Xilai announced that the United States and China have signed a three-year
pact limiting China's exports of 34 textile and apparel products until 2008. The agreement was very
similar to a June 10, 2005 agreement the European Union reached with China. U.S. producers
expressed satisfaction over the measure, while U.S. importers and retailers, were displeased over the
limits that the agreement imposed.
Some domestic producers are currently expressing concern that Chinese producers are currently
shipping textile and apparel goods to a second country, such as Indonesia, en-route to the United
States (transshipment) for the purpose of circumventing the limits set forth in the U.S.-China
agreement. This report will be updated as events warrant.
