Trade move by US government is 'poll ploy': Opinion

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Last updated at: (Beijing Time) Monday, November 24, 2003

Trade move by US government is 'poll ploy': Opinion

Analysts warned Sunday that the US Government could use trade protectionist measures against China as an electioneering ploy in the run up to next year's presidential polls.

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Analysts warned Sunday that the US Government could use trade protectionist measures against China as an electioneering ploy in the run up to next year's presidential polls.

Washington has re-imposed quotas on three types of textile products, a move which has stunned Chinese manufacturers and concerned industrial analysts that harsher measures could follow in an attempt to garner support for US President George W Bush's bid for a second term.

"We are worrying that it (the United States) will probably continue to impose temporary quotas on toys, other textiles or even plastic products since it has decided to set quotas on Chinese imports of knitted fabrics, dressing gowns and bras," said Zhang Hanlin, director of the World Trade Research Institute of the University of International Business and Economics.

The protectionist measures in textiles, which is a sunset industry in the United States, have remained quite strong, said Zhang, adding that he believed the country would probably impose protectionist measures during the election year on industries which it thought were affected by foreign competition.

US Commerce Secretary Don Evans announced in Washington on Tuesday that the US Committee for the Implementation of Textile Agreements had decided to set quotas on Chinese imports of knitted fabric, dressing gowns and bras, which he claimed "demonstrates the Bush administration's commitment to our trade rules and America's workers."

Details of the imposed quotas will be decided within 60 days, after negotiations between both sides, according to the Chinese Chamber of Commerce for Importers and Exporters of Textiles.

The negotiation period is set according to China's committ-ment to the World Trade Organization.

The US move caused concern in currency markets last week and hammered the dollar to its lowest level ever against the euro, mainly due to market worries over increased trade tensions.

The move has also caused alarm in the US, highlighting the risks of such a decision and exposing splits over the administration's trade policy.

Only two days after the announcement, Federal Reserve Chairman Alan Greenspan warned that "creeping protectionism" could weaken the trend towards globalization.

"Some clouds of emerging protectionism have become increasingly visible on today's horizon," Greenspan warned.

"It is imperative that creeping protectionism be thwarted and reversed," Greenspan said.

Laura Jones, executive director of the US Association of Importers of Textiles and Apparel, was quoted by the Wall Street Journal as saying: "Not a single job is going to come back to the United States because of this decision."

"Slapping the quota on China will merely shift the trade to other countries, mostly in Asia," she said.

Echoing Jones' remarks, Zhang also indicated such a decision can only worsen job opportunities for the US distributors and retailers because its domestic manufacturers cannot meet their demands and more than 80 per cent employees in the country are in the service industry.

Many Chinese manufacturers and exporters have begun to take retaliatory measures in order to lessen the decision's impact.

Zhang Jun, a department manager with the Beijing Textiles Import and Export Corp, said it has co-operated with other foreign companies to shift their export destinations.

However, Long Yongtu, secretary-general of Boao Forum for Asia, and also China's former chief trade representative, said investors should not overreact to the textile quotas.

"There is a general trend away from the specific case," Long said at a two-day forum on WTO and Chinese enterprises' strategy which concluded yesterday in Beijing.

Long said Sino-US relations are currently in better shape than ever before, so he personally believed that the trade dispute could be settled amicably.

The United States said on Friday that it took China's protests seriously over plans to introduce import quotas on certain textiles and attached importance to dialogue with China.

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