Tags: The | New | Chinese | Threat

The New Chinese Threat

Friday, 01 October 2004 12:00 AM

The American textile industry is expressing concern that removing quotas will cost our own country 600,000 jobs. Undoubtedly this is an issue upon which political candidates are trying to capitalize this fall, particularly in North and South Carolina, which serve as a center for the flagging textile industry. The textile industry is trying to mobilize workers and their families to participate in this fall's election. It is also urging the United States Government to: 1) maintain quantitative limits on Chinese imports 2) force China to stop manipulating its currency and 3) discourage China from subsidizing its textile and apparel industry.

A report recently issued by the National Council of Textile Organizations, entitled "The China Threat to World Textile and Apparel Trade," shows China's share of the U.S. market in apparel categories already released from quota controls on January 1, 2002 has quickly increased from 9 percent to 72 percent through June of this year. This surge has occurred in just 30 months! The report further predicted that China will command as much as 80 percent of those markets by the end of this year.

There is a safeguard that allows the United States and other World Trade Organization (WTO) members to continue quotas for another one to three years. The manufacturers are taking the unusual step of asking our country's trade experts to utilize the special China textile safeguard before the remaining quotas are lifted. (Current U.S. regulations are based upon forcing the domestic industry to prove actual damages have occurred before the safeguard can be implemented.) Based upon the experience of the prior removal of quotas, U.S. manufacturers have been emboldened to take this step to stem an anticipated flow of Chinese exports of shirts, blouses, towels, sheets, pants, and many other textile products into our country.

Karl Spilhaus, President of the National Textile Association, told The New York Times: "We can't wait for the market disruption to occur. That's tantamount to calling the fire department after the house has burned down."

The Commerce Department has said it would review the request, making clear that the petitions submitted would have to include specific data on the deleterious impact of Chinese imports on the United States market. There is some reason to hope that in an election year the petition will be taken seriously.

However, associations representing importers are, not surprisingly, unfriendly to the request brought forward by the textile and apparel manufacturers. Retailers are also not supportive; some companies claim that continued quotas would prevent them from being able to offer their customers goods at cheaper prices.

A Chinese military threat, if it comes, is likely to be at least a few years off. Not so a Chinese economic threat to the livelihood of workers, a threat is clearly felt by many countries other than the United States. In March a number of representatives of textile and clothing manufacturers met in Istanbul and signed a declaration urging the WTO to implement a two-year extension of the quotas. They noted that when the quota phase-out was negotiated over 10 years ago, the People's Republic of China was not a WTO member, and few envisioned China’s becoming a member or utilizing predatory practices.

The March 2004 Declaration said: "…the January, 2002 admission of the People's Republic of China into the WTO represents a substantial and material condition not contemplated when our countries agreed to the Uruguay Round [the initial worldwide trade guidelines] timetable for the quota phase-out. The fact that China will now be treated as a WTO member for purposes of the phase out has irrevocably altered the reasonable transformation of global production and sourcing patterns that the elimination of global production and sourcing patterns that the elimination of quotas had originally intended."

China has made surprising and massive penetration into Australia and Japan, which have no quota whatsoever upon Chinese textile and apparel imports. The Declaration warned, "China's massive growth has come at the expense of virtually all other participants in the market, especially the least developed and the developing countries which are poised to lose as many as 30 million jobs due to the quota phase-out."

Signers of the Istanbul Declaration include American groups such as the National Cotton Council, the National Council of Textile Organizations, the American Manufacturing Trade Action Council and industry associations from more than 50 countries ranging from Argentina to Zambia.

If the United States does not utilize the textile safeguard this year based upon the Chinese threat, expect even more heated calls for its use to be issued in 2005, particularly if the predictions about widespread job losses in our textile and apparel industries are proven accurate.

Currently there are some positive economic indicators but this cannot be said for the textile and apparel sector that has lost nearly 700,000 jobs - roughly 52 percent of its workforce -- in the last 10 years.

Most Americans are working, earning money and consuming, but it is stories such as the pending doom of the textile industry through suspension of quotas on textiles and apparel - and the rise of China as the dominant player in those specific markets - that are likely to create anxiety into the minds of many American workers this fall.

09/28/2004 $7,354,347,561,874.48 09/24/2004 $7,348,056,713,762.44 09/23/2004 $7,348,106,263,348.33

10/14/2003 $6,816,232,489,123.39 http://www.publicdebt.treas.gov/opd/opdpenny.htm "There is no free lunch." Milton Friedman ------------------------------------------------------ Interest Expense on the Debt Outstanding The monthly Interest Expense represents the interest expense on the Debt Outstanding as of each month end. The interest expense on the Debt includes interest for Treasury notes and bonds foreign and domestic series certificates of indebtedness, notes and bonds; Savings Bonds as well as Government Account Series (GAS), State and Local Government series (SLGs) and other special purpose securities. Amortized discount or premium on bills, notes and bonds is also included in interest expense. The fiscal year Interest Expense represents the total interest expense on the Debt Outstanding for a given fiscal year [October through September] Interest ExpenseFISCAL Year 2004 August $ 18,988,722,254.18 July 15,097,639,601.03 June 84,468,634,709.08 May 20,432,938,610.90 April 12,755,485,706.79 March 14,096,687,261.36 February 15,150,706,352.06 January 13,004,064,259.60 December 82,435,960,974.56 November 19,292,044,501.20 October 13,311,682,915.94 ---------------------- FISCAL Year Total $ 309,034,567,146.78 http://www.publicdebt.treas.gov/opd/opdint.htm [Our 11-month interest expense = $309 billion, 34 million, 567 thousand, 146 dollars and 78 cents. ]

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The American textile industry is expressing concern that removing quotas will cost our own country 600,000 jobs.Undoubtedly this is an issue upon which political candidates are trying to capitalize this fall, particularly in North and South Carolina, which serve as a center...
Friday, 01 October 2004 12:00 AM
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