Blog: Leonie BarrieChinese quota conundrum

Leonie Barrie | 19 November 2003

It’s not surprising that the Bush administration’s decision to re-impose quotas on Chinese imports of bras, dressing gowns and knit fabrics has polarised industry opinion. On the one hand, US textile makers are claiming victory, having lobbied extensively for the "safeguard" quotas that were negotiated as part of China’s accession into the WTO. On the other, apparel makers and retailers say the decision will raise prices for consumers. The one party that hasn’t had a lot to say on the matter is the Chinese. But maybe that’s for a very good reason. All the shouting and celebrating is masking the fact that China could be the winner in all this.

As Mike Flanagan of UK sourcing intelligence firm Clothesource told me today: “The decision is effective only for a year. The new quotas are set at a level at least five times (and in one case three hundred times) the level of US imports from China in 2001. It affects no-one but China. It is, to the letter, in line with agreements made with China when China joined the WTO. It is also, to the letter, in line with agreements made with the WTO. And its timing is a clear signal to China that the new quota will not be around next year. We believe it is actually a victory for China.”


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