April 27, 2004

By: Nadina Charles
Website: http://www.bra-n-bras.com

AAFA President Expresses Outrage at China Safeguard Decisions on Bras and Dressing Gowns

Kevin M. Burke, President and CEO of the American Apparel & Footwear Association, expressed deep disappointment today over a decision by the Bush Administration to reimpose quotas on bras, dressing gowns, and robes imported by U.S. companies from China.

U.S. apparel companies will clearly be hurt by this decision, stated Burke. The sudden reimposition of quotas on products that have been liberalized for nearly two years will result in new quota costs that were not anticipated when contracts were written and products shipped. Who is supposed to pay the Chinese Government for these new quota fees In response to a petition filed by a coalition of textile companies several months ago, the Bush Administration decided to invoke safeguard authority to restrict imports of bras, dressing gowns, and robes, as well as imports of knit fabric, from China.

The authority can be invoked if the U.S. Government believes imports from China are causing market disruption for the like or directly competitive product in the United States. The fact is that no such disruption exists at least not until the effects of this ill-considered decision begin to take their toll on U.S. bra, dressing gown, and robe companies and their employees, continued Burke.

We don't see a commercial benefit for the U.S. textile industry either since this will not result in more production in the United States. In fact, this will probably only hurt them in the long run by raising expectations that they will gain business that will be lost by the Chinese. Most likely, that business will go to many of China's other Asian competitors.

Although the Bush Administration received hundreds of comments on the three petitions, no apparel interests and specifically no manufacturer of bras, dressing gowns, and robes filed comments supporting the reimposition of quotas on U.S. imports of these products. In addition, a number of apparel companies filed comments in opposition to these quotas noting that, instead of causing injury, imports from China had actually helped their profitability and competitive position.

Moreover, AAFA filed comments opposing the reimposition of quotas on apparel imports from China. AAFA took no position on the knit fabric petition.

Among other things, AAFA's comments noted that:

• U.S. production levels demonstrate no correlation with increases in U.S. imports from China;

• Prices of domestic production reflect no erosion since China's accession to the World Trade Organization (WTO);

• U.S. import prices from China now reflect levels comparable, if not higher, to the rest of the world and to other major supplier countries; and

• U.S. imports from many other major supplier countries have also experienced major increases in imports since the elimination of quotas. Burke reserved much of his criticism for the safeguard process through which the decision was reached.

This is a disruptive procedure that yielded a flawed result, Burke noted. It sets a bad precedent for the future, and only encourages more such petitions in the future. Burke said the Administration should instead be focusing on positive measures, such as the swift conclusion of a commercially meaningful U.S./Central America Free Trade Agreement, that have the ability to build a healthy U.S. textile industry and promote a dynamic hemispheric trade relationship. Burke urged the Bush Administration to quickly publish clear guidelines to ensure that the harm of this action to U.S. apparel companies is minimal. He also urged the Bush Administration to work to re-establish a productive dialogue with China to avoid the use of this safeguard measure in the future.

Emotions clearly run high when it comes to China. Burke added, We should instead foster a relationship that encourages China to be both a fair competitor and a predictable partner.

About The Author:

Nadina Charles is a successful author and regular contributor to http://www.bra-n-bras.com.  A tasteful look at the bra industry, products and manufacturers.