Impact of New US Textile and Apparel Quotas Against China

published in Issue 108, November-December 2003   Report price: Euro 275.00; US$ 365.00

In November 2003 the US Committee for the Implementation of Textile Agreements (CITA) announced that it had decided to impose quotas aimed at restricting imports of five categories of textile and clothing products from China, namely: category 222 (knitted fabrics); categories 350 and 650 (cotton and man-made fibre dressing gowns and bathrobes); and categories 349 and 649 (cotton and man-made fibre brassières).

The quotas follow a surge in US imports from China, resulting partly from the elimination of quotas on several product categories when China joined the World Trade Organisation (WTO) in late 2001, and partly from the integration of a number of categories at the beginning of 2002 in accordance with Stage 3 of the Agreement on Textiles and Clothing (ATC). All five product categories had previously been subject to quotas?either in the form of specific limits or as part of group limits. And in all cases, quota restraints had been eliminated under the ATC.

The new quotas are unlikely to have much impact on China. The five categories accounted for only 0.3% of Chinese textile and apparel exports in 2002. The quotas are also unlikely to have much impact on the US textile industry. Limiting import growth from China will not make the US textile industry more competitive against low labour cost countries. Instead, it will provide more market share for other low cost suppliers. Perhaps the most significant impact, however, will be to deter US buyers from sourcing in China. Buyers have already expressed fears that new quotas may be introduced on other, more significant product categories after they have placed orders with Chinese manufacturers.

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