Chinese textiles continue to be a hot topic around the world. The Chinese, since joining the WTO continue to flood markets with very inexpensive textiles and clothing and it’s creating real problems for other producers and nations who once had strong textile industries.
The U.S. textile industry remains on a downward spiral with no relief in sight. The cotton growers have developed a love-hate relationship with China. Right now, according to Robert Weil, a cotton merchant and VP of the National Cotton Council, notes that Chinese textile mills bought 8 million bales of cotton in the ’04-’05 buying season and could buy as much as 14.5 million bales in the coming season. He also said in his testimony to the House Ways and Means Committee that these great sales come “at the demise of the U.S. textile industry.
Since China joined the WTO, nearly U.S. textile companies have laid off 381,000 workers. The problem is the Chinese do this a lot cheaper. Major retailers like Wal-Mart by 70% of their inventory from China and a major portion of these products are textile products. The U.S. has reimposed some quotas restrictions on various textile products recently in order to slow down the onslaught.
The European Union Vs. China
When a global quota system ended in January, Chinese textile imports increased exponentially. With an increase in imports of over 500%, the rest of the world’s textile producers were sent reeling. The European Union launched an investigation but some European textile companies want emergency measures put into place. The European Union has so far resisted putting measure into place.
“In view of the seriousness of market disruption in these categories, formal consultations need to begin immediately,” said the commission in a statement.
Right now, the ball is in China’s court however. As part of their entry arrangement into the WTO, China is required and expected to help work out possible problems with the influx of their goods onto the market. The EU will conduct talks with the Chinese and after that, if China fails to rain in, temporarily, the influx of textiles, the EU could impose restrictions on the Chinese products.
“Only if China does not take effective action will the Commission propose temporary limits on the growth of Chinese exports in the categories concerned in 2005,” the statement added.
John Stith is a staff writer for Murdok covering technology and business.
