International Trade Law News

Published by Jacobson Burton Kelley PLLC

The U.S. textile and clothing industry today filed petitions with the Committee for the Implementation of Textile Agreements seeking the imposition of safeguard quotas on 14 categories of clothing made in China. The cases cover knit shirts, sweaters, brassieres, dressing gowns and trousers made with man-made fibers. These petitions come only two days after the Bush Administration self-initiated safeguard investigations on four categories of apparel products from China.

Separately, the European Commission today published guidelines that will clarify under what circumstances the E.U. would consider imposing safeguard actions against textile and clothing imports from China. The guidelines relate to the textiles-specific safeguard clause written into China's Protocol of Accession to the WTO in 2001 which was incorporated into E.U. law in 2003.

The E.U.'s safeguard guidelines establish procedures and criteria for the objective and transparent use of safeguard proceedings. The guidelines establish alert zones for each category of Chinese textiles imports allowing for increases in China's current market share. To reach these alert zones Chinese exports will need to show a rapid and sustained rise over a defined period. If these thresholds are reached, the Commission, acting on its own initiative or at the request of a Member State, will undertake an investigation. Informal consultations with the Chinese will allow China to act to provide sufficient remedy. If no remedy is achieved, formal WTO consultations with the Chinese authorities would require them to act to limit textiles exports in the affected categories. If this is still insufficient, safeguards can be invoked. Safeguards would take the form of quantitative import restrictions applicable for a year, but extendable on reapplication. The guidelines also allow for emergency procedures in the case of a rise in imports of such magnitude that serious material injury to E.U. industry is imminent. In this case formal consultation with the Chinese could be launched without a preceding investigation.