January 24, 2003	Friday	Ziqa’ad 20, 1423

WASHINGTON, Jan 23: The US and Caribbean textile producers on Wednesday said they feared competition from a flood of low-priced Chinese goods once the United States fully phases out import quotas in a little less than two years.

In a testimony before the US International Trade Commission, the American Textile Manufacturers Institute said US textile companies were already facing “extreme price pressures” from China, whose exports to the United States have surged since joining the World Trade Organization a year ago.

That problem will only increase after Jan 1, 2005, when US quota restrictions on textile and apparel imports are eliminated, said Jerry Rowland, chief executive officer of National Textiles, which is based in North Carolina.

He said the US companies face some of their fiercest competition from government-owned Chinese companies that routinely lose money.

“When you’re competing with China, you’re not only competing with low wages, you’re competing with companies that do not have to make a profit,” Rowland said.

In September, the textile manufacturers asked the Bush administration to restrict imports of certain Chinese apparel products under so-called “safeguard” provisions of the agreement Beijing negotiated to join the WTO.

There has been no response so far from the administration to that request, ATMI Senior Vice President Carlos Moore told the trade panel.

The United States pledged to phase out its textile and apparel import quotas under the 1994 Uruguay Round world trade agreement. It currently has quotas on 46 developing countries that together accounted for 83 per cent of the total value of US textile and apparel imports in 2001.

However, even after the quotas are eliminated, the United States will be allowed to maintain tariffs averaging 24 per cent on textile products and 9 per cent on apparel products — at least until a new world trade deal is struck.

China, South Korea, Taiwan and other big suppliers face US quotas on the largest number of products. Other countries, such as Nepal, may have limits on only one or two textile goods they ship to the United States.

The US Trade Representative’s office has asked the ITC to investigate how ending the quotas will affect the competitive position of US trading partners.

In prepared testimony, ATMI told the trade panel that it expected China to dominate the US import market after the quotas were eliminated.

Vietnam, India and Pakistan and countries that have preferential trade deals with the United States would make up a second tier group of suppliers, the textile group said.

Chandri Navarro-Bowman, an attorney representing Dominican Republic textile producers, agreed with that assessment.

She warned the end of the quotas will deliver a “devastating blow” to the Dominican Republic’s apparel industry unless it wins new tariff concessions from the United States.

The government of the Dominican Republic invested heavily in the textile sector in response to trade benefits extended by the United States in the mid-1980s.

It has seen part of that trade advantage whittled away by the North American Free Trade Agreement, which gave Mexican textile producers even better access to the US market.

With the United States now embarked on free trade talks with five Central American countries, Santo Domingo fears losing the rest of its textile industry unless it can also negotiate a free trade deal with Washington, Navarro-Bowman said.—Reuters