China moves toward monopolizing non-quota apparel categories in both US & EU
04 Mar '06
8 min read
For most of apparel sold in the United States and Europe, almost $70 billion dollars worth, China is still under quota. And the quotas have worked: while China ran roughshod over its competitors in the quota-free categories, it has been held back by quotas in the safeguard categories.
These quotas, however, will last only a few more years. In 2009, the safeguard mechanism goes out of existence and there is nothing to replace it. This means that the writing is on the wall for all of us. Unless something is done about China in the Doha Round, the developing world will lose tens of billions of dollars in exports – and my industry will lose right along with them.
Simply put, if you are a major apparel exporter, you will likely lose those exports – and those jobs – once those quotas go away.
The GAFTT coalition has called for a sectoral negotiation so that these issues may be fully addressed. NCTO fully supports GAFTT's call. Because China is such a heavyweight in this sector, and because this sector is of such vital importance to so many developing and least developing countries, it only makes sense for a separate negotiating group to be set up to find a solution that enables development for all, not destruction for most.
Regarding other proposals for a sectoral, I would ask the developing world to consider these carefully. Promises of additional market access are no good if the end result is that you will end up competing head-to-head with China. As it has done every other time, China will simply take your new export markets. Be diligent and make sure that your current market access is preserved first. The EU and U.S. textile safeguards have saved millions of jobs around the globe – the trade figures are undeniable – make sure that those jobs continue to exist as a result of the Doha Development Round. Keep in mind as well that even when trade preferences have been in place, China has still taken the market. China's price advantages are too great for just trade preferences to compensate. Only safeguards have been effective in slowing China's growth.
marketing@alchempro.com
