Financial Daily from THE HINDU group of publications
Monday, Oct 18, 2004
Industry & Economy - Textiles
US move to clamp down on Chinese textile imports may benefit India
New Delhi , Oct. 17
INDIAN textile exporters could well be looking at the possibility of a clean sweep of the global markets from January next year. Indian suppliers could gain market share at the expense of their Chinese counterparts, with the US and another 50 countries planning to impose quantitative restrictions on select imports from China, even after the global trade in textiles is freed of quotas.
With the threat of mass-scale Chinese exports looming large, the US administration is reportedly considering imposing limits on Chinese shipments, under intense pressure from its domestic industry lobbies. Though the quota regime is to be abolished by January 1, 2005, countries can resort to imposing quantitative restrictions on imports from China beyond the stipulated date, since the country was a late entrant to the World Trade Organisation (WTO).
Under the terms of the agreement that gave Beijing WTO membership, countries can continue with quotas against Chinese imports if they can prove that the shipments are reaching excessive proportions or if instance of dumping can be cited.
While a section of the Indian exporters are upbeat about the prospects of a clampdown on Chinese products, industry representatives advocate caution. "With the concern among members of the US industry regarding Chinese imports reaching fever pitch, there is a distinct possibility of a selective clampdown by the US administration. Indian industry should not, however, rest as the Chinese administration has enough clout to ensure that the clampdown is at best only selective," an official with a textile industry association said.
Exporters concur that even in case of a selective clampdown, Indian suppliers have a chance to break into product categories such as suits, shirts and trousers, in which China has a stronghold.
The US textile industry, through the US National Council of Textile Organisations, last week, asked the Bush Administration to put a limit on Chinese shipments of trousers, shirts, sheets and other textile products. Also, with five major US industry groups backing the petitions to the Government, the warning of major job losses is likely to be taken seriously, expect analysts.
A coalition of six US apparel, textile and fibre producing trade associations, along with a labour union, filed an initial petition on cotton trousers on October 8. The petition states that 51 more countries are also planning safeguard measures against Chinese textile products.
The coalition said it expects to file nine more petitions during the coming days, covering an additional 13 categories, including man-made fibre trousers, wool trousers, cotton knit shirts, man-made fibre shirts, cotton and man-made fibre underwear and cotton sheets.
The US administration, including officials from the Commerce, State, Labour and Treasury Departments and the US Trade Representative's office, is expected to decide by November 1 when the petitions will be admitted.
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