Textile Importers

USA limits textile importers from China.

Textile importers and retailers have sued the US Government to block a proposed limit on imports from China.

Domestic textile producers have asked for textile quotas because they say Chinese imports will damage the domestic industry.

In 2004, the Commerce Department and four other government agencies investigated the allegations.

But the US Association of Importers of Textiles and Apparel (USA-ITA) claimed the case was based on inaccurate information and violated importers' rights.

According to Laura Jones, USA-ITA's executive director, the rules for government agencies - which together make up the Committee for the Implementation of Textile Agreements (CITA) - ban petitions such as those they received from the textile industry.

CITA had changed the rules based "on some future threat", she said.

"The government is accepting petitions that don't even meet its own limited standards. The government's behaviour is outrageous."

China objects

US textile manufacturers made the petitions based on a safeguard arrangement agreed with China during its entry negotiations with the World Trade Organisation (WTO) in 2001.

The agreement gives WTO members the right to impose temporary quotas if Chinese imports are found to cause market disruption.

But China has said that any import quotas placed on its textiles would have an impact on bilateral trade ties and warned that it might take the dispute to the WTO.

The USA-ITA lawsuit could boost China's position in the argument.

The new developments come weeks before the expiration of the Multi-Fibre Agreement, signed 10 years ago with the aim of preventing any single country dominating the world's textile market.

Textile industry analysts expect that China, which currently has 20% of the global textile trade and 28% of trade in clothing, will be the biggest gainer when the Multi-Fibre Agreement expires at the end of this year.

Chinese Textiles Import limited by Licences in the UK

The EU are equally concerned with this issue. Importers are made aware that on 10 June 2005 a new Chinese textile regime was agreed between China and the European Commission and it took effect the following day. This was a new regime and not an extension of the old regime under the Agreement on Textiles and Clothing (ATC) that came to an end 31 December 2004.

Licences for goods falling to the 10 quota categories and shipped under the old ATC regime and still held in bonded warehousing will be automatically renewed because evidence of shipping* (export licence) was presented with the original application.

To assist the trade the same import licence number will be re-issued whereever possible.

Handloom, Folkloric and Handicraft Textile Products ... Imports of certain handloom fabrics, and cottage industry products made up from such handloom fabrics, and traditional folkloric handicraft textile products are subject to surveillance licensing. Applications need to be supported by a valid certificate issued by the appropriate authority in the country of origin confirming that the goods are the product of a cottage industry.

Quota licences issued for goods shipped* between 11 June and 19 July 2005 inclusive, that is those without an export licence, were issued with a 6 month validity. There are no legal powers to extend these licences. No applications for replacement licences can be considered. Textile traders are advised to ensure that the goods are entered onto free circulation before the original validity expires.

Quota licences issued for goods shipped* on or after 20 July 2005, that is those with an export licence, can be extended. These licences were issued for 6 months validity with an automatic extension for 6 months that is 12 month validity. In exceptional circumstances they can be extended for a further three months with the approval of the textile committee in Brussels.

Traders who defer putting licensable goods into free circulation on arrival in the UK must ensure that a valid licence is in existence when the goods are put into free circulation. The length of time goods may stay in a bonded warehouse is therefore restricted by when the goods were shipped from China. The administration of monitoring licence usage and validity is an additional overhead traders must consider when licensable goods are entered into customs warehousing rather than free circulation.