WASHINGTON, DC — Representatives of the National Council of Textile Organizations (NCTO) and the American Manufacturing Trade Action Coalition (AMTAC) were among those who testified before the U.S.-China Economic and Security Review Commission this month.
NCTO President Cass Johnson and AMTAC Executive Director Auggie Tantillo on Feb. 4 testified on the threat posed by China in textile and apparel manufacturing and how the removal of quotas on imports from China is likely to impact the U.S. textile and apparel sector.
The hearing is part of a two-day public hearing of the commission to examine China’s compliance with its World Trade Organization (WTO) obligations to date and the potential actions and strategies the U.S. government should pursue to address compliance shortfalls.
As a component of the hearings, the commission also explored the use and effectiveness of the various import safeguards permitted under China’s WTO accession agreement.
Also testifying were UNITEHERE Vice President Harris Raynor, NRF Vice President and International Trade Counsel Erik Autor and USA-ITA Vice President Julia Hughes.
Johnson’s testimony highlighted the assertion that “for the past 15 years, China’s government has been aggressively implementing an ambitious plan to make its textile and apparel sector the dominant player in world trade,” he said.
“In pursuit of this goal, the Chinese government has poured tens of billions of dollars into its textile and apparel sector in the form of free capital, direct and indirect subsidies and a host of other ‘incentives’ to drive competitors out of the markets and create an environment where no one, including the lowest cost-producing countries in the world, can compete with China in world markets,” he added.
He went on to say that in every case where China has gone head to head with other producers, China has won by enormous margins.
“Typically, China has ended up with a 75 percent share of the market with the next largest supplier getting 5 percent. This happens because of the pervasive and aggressive intervention of the Chinese government in its textile and apparel sector.”
In response to China’s unfair trade practices and the threat it poses to textile and apparel producers around the world and especially those in the U.S., Johnson called on the U.S. government to:
• move ahead quickly on the safeguard petitions or self-initiate safeguard actions on its own;
• push for a permanent safeguard mechanism in the Doha Round of trade talks; and
• impose punitive sanctions on China’s imports if China does not move quickly to float its currency, initiate WTO subsidy cases against China’s use of government banks to finance its export machine, clamp down on massive transshipments and illegal smuggling of textile and apparel products from China and reverse the Commerce Department’s position against allowing industry to attack China’s subsidy schemes using countervailing duty laws.
Meanwhile, Tantillo told the panel that, unless restrained in a forceful and effective manner, it is likely that China will control 75 percent or more of the U.S. and 50 percent or more of the global textile and apparel market by the end of 2007.
If that scenario occurs, 30 million jobs, including more than 500,000 from the U.S., would be shifted from the rest of the world to China, he said.
Other consequences of allowing China to monopolize global trade in textiles and clothing are “equally disturbing,” Tantillo said.
“If the U.S. government concedes Chinese monopolization of the U.S. and global textile and clothing markets, it will lose enormous policy making influence in the world,” Tantillo said.
