Flood of Chinese clothing creates concern about jobs

WASHINGTON -- Shirts, pants, underwear and a lot of other clothes made abroad have arrived in the United States by the bulging boatload since Jan. 1, when more than three decades of quotas ended.

Consumers are rejoicing over the lower prices. But the domestic textile and apparel industry is complaining about the loss of thousands of jobs from what it contends is unfair competition. It wants the Bush administration to move quickly to limit the soaring number of shipments from China.

"Time is so critical. The amount of goods that China is flooding into this market is so large that only the government can move quickly enough to prevent a lot of textile jobs from being lost," said Cass Johnson, president of the National Council of Textile Organizations.

According to data released Friday by the Commerce Department, China shipped 84.48 million cotton knit shirts to the United States in the first three months of this year, an increase of 1,258 percent from the same period a year ago. Shipments of 78.99 million cotton trousers represented an increase of 1,521 percent

Just three months after the quotas expired, U.S. manufacturers say the fallout has been swift and severe. Another government report Friday showed the loss of 7,600 textile and apparel jobs, bringing job losses for the industry to 17,200 this year.

In the past three months, 14 textile plants in five states -- North and South Carolina, Pennsylvania, Indiana and Virginia -- have shut down. More could come, industry officials say, without federal action.

"The textile and apparel industry will experience severe job losses in 2005 unless the U.S. government decisively confronts China's predatory trade practices," said Auggie Tantillo, executive director of the American Manufacturing Trade Action Coalition, an industry group.

For more than three decades, quotas restricted imports of clothes, yarns, cloth and other textiles to the United States and other wealthy nations. Those barriers disappeared as part of an agreement in the last round of global trade talks.

The quotas have been phased out over 10 years. But the United States and other nations kept controls on the biggest categories of clothing as long as was permitted, sheltering their domestic industries.

As expected, China has been the biggest beneficiary of the total elimination of quotas, reflecting the country's highly efficient manufacturing plants.

Under the terms for China's admission to the World Trade Organization, the United States and other countries have the power to restore the quotas -- called government safeguards -- should the surge in Chinese shipments prove to be disruptive to the domestic industry.

The quotas would cap growth in categories such as trousers and knit shirts to just 7.5 percent more than shipments of those goods during the previous 12 months.

The industry applied for this protection in 20 different clothing categories last fall.

Retailers, who benefit from lower-cost products, persuaded a court to block the government from considering the request, arguing there was no basis for quotas just because of the threat of higher imports.

Textile industry officials are preparing new requests for help. They also are lobbying the administration to initiate cases rather than awaiting industry requests.

The government's filing of its own cases could cut the time it takes to make a decision from four months to perhaps five weeks, according to the industry.

The industry hopes textile-state lawmakers will hinge their support of a free trade agreement with six Latin American countries -- a White House priority -- on an administration agreement to bring cases against China.

The administration has not said publicly what it will do. "We will be driven by the facts in the case," Commerce Secretary Carlos Gutierrez told reporters last week.

Some trade experts would not be surprised if the two issues become entwined. The White House needs votes to pass the Central American Free Trade Agreement. In 2003, it courted textile-state lawmakers when the administration faced a close House vote that went Bush's way, giving the president the power he needed to negotiate new trade deals.

"There is a precedent to believing that the administration can be held hostage," said Dan Ikenson, a trade policy analyst at the libertarian Cato Institute. The group opposes putting quotas back in place on Chinese textile products, saying that would hurt U.S. consumers.

"This is an extension of business as usual for the U.S. textile industry, which has become addicted to government assistance," Ikenson said.

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On the Net:

Commerce Department's textile office: http://otexa.ita.doc.gov

National Council of Textile Organizations: http://www.ncto.org

United States Association of Importers of Textiles and Apparel: http://www.usaita.com