Saying a “crisis of unprecedented proportions” exists, textile and clothing trade associations meeting in Brussels, Belgium, are asking for an emergency meeting of the World Trade Organization to delay the expiration of worldwide textile and apparel quotas on Jan. 1.
Spokesmen for the organizations said they believe that China could achieve a “near-monopoly” of the world textile and apparel market if nothing is done about the quota expiration. China has denied its textile industry poses a threat to the remainder of the world's textile manufacturers.
“The expiration of worldwide textile and apparel quotas represents a crisis of unprecedented proportions,” said Suleyman Orakcioglu, chairman of ITKIB Association in Turkey, in a press statement issued from the meeting in Brussels.
“Up to 30 million textile and clothing manufacturing workers will lose their jobs and $200 billion in world market share will be lost if one or two countries monopolize the world's textile and clothing market.”
A communiqué issued by textile and clothing trade associations from the 47 countries represented at the meeting expressed support for a three-year extension of the quotas; implementation of automatic safeguard mechanisms to prevent disruptive surges of textile and clothing imports; and expedited and effective remedies to unfair trading practices employed by certain major suppliers.
“The WTO has two choices: It can do nothing and witness a massive economic catastrophe, or it can take decisive action to ensure that world trade in textiles and clothing is not disrupted,” said Jean-Francois Gribimont, outgoing Eurocoton president. “Clearly, the latter is the only way to preserve economic stability.”
Warning of threat
U.S. textile manufacturers have been warning for years that China's escalating exports to the United States posed a major threat to their industry. But textile mill executives in other countries have only recently begun to recognize the impact China's exports could have on their sales.
Those concerns led to 76 organizations in those countries signing the Istanbul Declaration, a document drafted at a meeting in Istanbul earlier this year. The associations organized this week's meeting in Brussels.
“Clearly it is time for governments to act,” said Allen Gant, chairman of the National Council of Textile Organizations in the United States, which helped organize the Brussels meeting. “Summit attendees are urging all governments whose textile and apparel industries are at risk to petition the WTO for an emergency meeting.”
China already controls more than 75 percent of the market in developed countries such as Japan and Australia that have no quotas on textile and apparel imports, said Cass Johnson, president of the NCTO.
“In the United States, in apparel categories released from quotas on Jan. 1, 2002, China jumped from 9 percent market share to 65 percent market share as of March 2004,” he said. “To make matters worse, Chinese market share in these categories is still increasing.
“So there is no need to speculate on what will happen after quotas expire on Jan. 1, 2005.”
Other officials said they have read reports that China is shipping goods to bonded warehouses in the United States so they can move them into U.S. retailers' hands as soon as quotas expire.
“One major U.S. apparel company announced last week that they were moving nearly 4,000 jobs from North America to East Asia in anticipation of the expiration of quotas,” said Auggie Tantillo, executive director of the American Manufacturing Trade Action Coalition. “If nothing is done soon, millions of jobs will be at risk worldwide even before quotas expire.”
“We need fair trade so the global economy can be disciplined. This is not protectionism but a fight against a monopoly by China,” said Ziya Sukun, executive director of the ITKIB Association of New York. “This is an international crisis. Every major region of the world will suffer substantial job losses if nothing is done about China.”