China promises textile tariffs; U.S. imposes new barriers
China's Commerce Ministry has announced, for the first time since its accession to the World Trade Organization (WTO), that it will impose tariffs on selected textile exports.
The move is widely seen as a response to the Bush administration's intent to set new limits on textile and apparel shipments from China to the United States.
The new tariffs will not leave Chinese textile and apparel manufacturers selling any less than they do now, but could prevent them from earning substantial profits after Jan. 1, when international quotas on textiles and apparel will expire for most other countries.
China did not indicate how significant its export tariffs would be, nor what textiles would be taxed. The Commerce Ministry said in a statement on its Web site that the intent of the tariffs would be to encourage Chinese producers to make higher-end textiles and apparel instead of cheaper products. A minimum tax will be levied on each garment, regardless of cost. A $1 tax for a T-shirt might discourage production if the wholesale price of the shirt is much less than $1, but not the making of silk blouses that are far more expensive.
'This is part of a string of measures China will take to ensure a smooth transition for textile integration following the end of the quota system,' Chong Quan, a ministry spokesman, told the New China News Agency.
Meantime, the U.S. Committee for the Implementation of Textile Agreements (CITA) has ordered the U.S. Customs and Border Protection (CBP) to subject 2004 exports of quota-class merchandise to the United States in excess of authorized quota levels to delayed release through staged entry, as violations of bilateral textile agreements.
For all 2004 exports exceeding the applicable 2004 quota limit from countries with bilateral textile agreements expiring on Dec. 31, entry to the United States will not be allowed until Feb. 1. For each succeeding monthly period, beginning on the 24th of each month, entry will be permitted for goods in an amount equal to 5 percent of the applicable base safeguard, until all shipment in excess of safeguard limits have been entered. Mary Brown Brewer, a spokesperson for the Department of Commerce, said the new barriers won't apply to goods shipped after Dec. 31.
The United States Association of Importers of Textiles and Apparel (USA-ITA) said the staged-entry barriers 'could have very serious and negative consequences for importers ' it is clear the Bush administration is making every effort possible to appease the U.S. textile industry on the eve of the expiration of the quota system.'
Partisans for the domestic U.S. textile and apparel agency said importers were getting what they deserved for allegedly having allowed clothing to be shipped in excess of quota limits in 2004.