China Benefits From Textile Quota Expiry

WASHINGTON - Feb 10/04 - SNS -- China will be a key beneficiary of the expiration of quotas under the Uruguay Round Agreement on Textiles and Clothing (ATC) in 2005, believes the U.S. International Trade Commission (ITC).

In its report Textiles and Apparel: Assessment of the Competitiveness of Certain Foreign Suppliers to the U.S. Market, the ITC said China can make almost any type of textile and apparel product at any quality level at a competitive price.

However, the extent to which China continues to expand its shipments following quota elimination in 2005 will be tempered by the uncertainty over the use by the United States of a textile-specific safeguard provision contained in China's WTO protocol of accession.

To reduce the risk of sourcing from only one country, U.S. importers also plan to expand trade relationships with other low-cost countries as alternatives to China, particularly with India, which also has a very large manufacturing base for textiles and apparel and a large supply of relatively low-cost skilled labor. One or two other low-cost exporting countries in South Asia (Bangladesh or Pakistan) are expected to emerge as major suppliers for a narrower but still significant range of goods.

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