WASHINGTON, DC — On Dec. 31, the U.S. Court of International Trade in New York City unilaterally blocked the China textile threat-based safeguard process sanctioned by China’s accession agreement to the World Trade Organization (WTO).
The judge issued an injunction prohibiting the U.S. government from considering threat-based special textile China safeguard petitions filed by the American Manufacturing Trade Action Coalition (AMTAC), the National Council of Textile Organizations (NCTO) and others representing a coalition of textile and apparel manufacturers, fiber growers and producers and organized labor.
AMTAC said it believes that the safeguard process was wrongly enjoined and that it is imperative that the U.S. government appeal this decision as soon as possible. AMTAC added that it hopes that the appellate process be expeditious so that the U.S. government’s consideration of the threat-based petitions already filed will not be delayed.
This ruling could open the door to allowing China to gain a monopoly share of the U.S. textile and apparel market in short order, threatening the economic livelihood of nearly 700,000 U.S. textile and apparel manufacturing workers in the United States, according to AMTAC.
The court order claims that the U.S. importing and retailing community will be irreparably harmed by the U.S. government considering threat-based special textile China safeguard petitions. In reality, AMTAC and NCTO said, the true parties facing irreparable damage in this case are the hundreds of thousands of U.S. workers who will be left jobless if the U.S. government is prevented from considering threat-based safeguards.
“NCTO is confident that the U.S. government’s action in accepting the safeguard petitions for review will ultimately be upheld and that the petitions will be allowed to proceed,” Cass Johnson, president of NCTO, said in a statement.
“In weighing whether importers and retailers may see their profits reduced because of a risky business sourcing strategy, or whether hundreds of thousands of jobs in the U.S. should be lost, NCTO believes that the court will find that the government has acted in an appropriate manner.”
NCTO also noted that earlier this month the National Retail Federation (NRF) submitted comments regarding the industry’s petitions that stated that its members would not significantly change their sourcing patterns once quotas were removed. Late last month, many NRF members have apparently submitted sworn declarations to the Court saying they plan to do exactly that by moving business to China, according to NCTO.
“This is yet more confirmation that the industry’s cases are fundamentally sound and that safeguards should be imposed,” Johnson said.
China’s ongoing use of unfair trade practices such as currency manipulation, export tax rebates, non-performing loans and other subsidies is aimed at driving all other producers out of business so it can gain a monopoly share of global trade in textiles and clothing, AMTAC and NCTO said.
These practices have proven devastatingly damaging. For example, in the apparel categories released from quota in 2002, China’s U.S. import market share went from 9 percent in 2001 to 72 percent as of June 2004, according to AMTAC statistics.
Also, since January 2002, 190,200 U.S. textile and apparel manufacturing jobs have been lost — many due to the surge in Chinese imports, the group added.
Undeniably, China poses an overwhelming threat to global textile and apparel markets. It is specifically for this reason, that the terms of China’s WTO accession agreement allow safeguard actions to prevent massive market disruption and job loss, the groups said.
The terms of the agreement are so clear that other countries, such as Argentina, Mexico and Turkey, have already implemented threat-based safeguard measures against China to prevent damage to their textile and apparel industries, the organizations pointed out.
AMTAC added that this injunction by the U.S. Court of International Trade suggests that it is prepared to overturn decades of legal precedent and undermine the Executive Branch’s authority to administer and interpret trade agreements.
The Executive Branch’s rulemaking and interpretation of trade agreements is exempt from the Administrative Procedure Act (APA) when it exercises its foreign affairs exemption as was done for the Committee for the Implementation of Textile Agreements (CITA), the trade associations said.
In essence, the ruling in this case is unprecedented in that it will overturn CITA’s ability to interpret trade agreements like China’s accession agreement to the WTO, AMTAC and NCTO said.
