Blog: China crisis
Leonie Barrie | 1 September 2005
Have US attempts to reach an agreement on how to reign in imports of low-cost Chinese textiles been clouded by the pileup of Chinese-made clothing at European borders? US-China talks failed to come to any conclusion yesterday amid signs that the Chinese are using the confusion enveloping the EU as evidence that import quotas don’t work. “Protectionism is a loss-loss deal for both sides in international trade while undermining the global effort to build a free and fair trade order,” the official China Daily newspaper said in its lead editorial. Beijing also argues that limits on Chinese goods would force US consumers to pay more for clothing.
The US has already imposed curbs or safeguards on a range of textile and clothing imports from China, capping growth at an annual rate of 7.5 per cent. But because the US made little secret of its intention to take safeguard action, it has managed to avoid the supply disruptions that have plagued Europe after quotas filled more quickly than expected. Despite being better prepared than their EU counterparts, US clothing buyers are still watching the commercial implications of the European stand-off with interest. Many have already diversified their sourcing to ensure pre-ordered goods aren’t held up by new safeguard limits. And Washington will be keen to negotiate a solution that doesn’t emulate that now being played out in Europe – and one that doesn’t lead to yet another cliffhanger when all restrictions are abolished at the end of 2008.
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