US to open textile and apparel market: China potential supplier

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Last updated at: (Beijing Time) Monday, February 16, 2004

US to open textile and apparel market: China potential supplier

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United States International Trade Commission (USITC) recently said the quota system implemented by Uruguay Round Agreement on Textiles and Clothing (ATC) would expire in 2005. By then most American textile and garment importers may choose China as supplier.

USITC issued a report on Feb. 9 on the effect that the new textile and garment trade system would bring about. It points out that China has the potential to become a leading force in US textile and apparel market because it has the ability to produce almost all kinds of textile and garment products at any volume of a competitive price.

However, the report also points out that it is still too early to predict the speed of increase as to the textile and apparel import from China because textile safeguard provisions were included in some of the agreements when China joined the WTO. How the US and other importer countries are going to employ these clauses is not yet clear.

In November 2003 the Bush administration used related clauses to impose quota restrictions on three kinds of textile product from China.

The USITC report says, the fact that imports from China keeps growing may bring about a possible large-scale shift of the US' overseas supply region. It points out that in order to reduce the risk of relying on one country as source for raw material and products American importers plan to expand trade relations with other low production-cost countries, particularly India. It believes that Bangladesh or Pakistan in time could become main supply countries who would provide a series of products of limited kinds. It says many countries' share in the US market may shrink, but at the same time many overseas economic bodies may become second-tier suppliers of special goods and services.

The report believes that thank to the adjacency in geographical location and the consequent low transportation cost Mexico and the Caribbean countries may still be the chief supply countries for quick turnaround products or mid-season orders. It says if the use of a third-country's fabrics is allowed, whether by a Central American or a larger-scope American free-trade agreement, it is likely to boost textile and apparel import from that hemisphere, particularly from Central America and Caribbean markets.

As stipulated in a clause of the free-trade agreement, signed in December 2003 by the United States, Salvador, Guatemala, Honduras and Nicaragua, the garment made in these countries by using fabrics from Mexico and Canada is exempted from import duty. Puerto Rico also joined this agreement later. However, the agreement mentioned has to be approved by the US Congress before it can enter into force as a law.

By People's Daily Online

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