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Textile trade deficit hits all-time high

The U.S. textile trade deficit rose to an all-time high of $73.1 billion last year, leading textile manufacturing groups to question how high it will be in 2005 if the Bush administration doesn't invoke safeguard provisions soon.

The increase in the textile trade deficit, which accounted for nearly 12 percent of the total 2004 U.S. trade deficit of $617.7 billion, also a record, occurred while textile import quotas were still in place for most categories of textile and apparel entering the United States. Those quotas expired Jan. 1.

Textile and other manufacturing groups seized on the new numbers to complain that the administration isn't doing enough to slow the flow of imports and stop the loss of U.S. manufacturing jobs.

U.S. retailers imported $89.25 billion of textile and apparel goods in 2004 or more than five times the total U.S. textile and apparel exports of $16.15 billion. The difference between the export and import numbers is the textile trade deficit of $73.1 billion, also a record.

The American Manufacturing Trade Action Coalition said the increase added to the long-term decline in U.S. textile and clothing manufacturing jobs, which fell from 1.05 million in January 2001 to 683,400 in January 2005.

AMTAC said China continues to play the major role in the destruction of the U.S. textile and apparel sector. Chinese manufacturers held a 25.02 percent share of the U.S. textile import market in 2004 — a 40.74-percent increase from 2003.

“These numbers show that China, through the aggressive use of unfair trade practices, already is the dominant player in the U.S. textile and apparel market,” said Auggie Tantillo, AMTAC's director.

The U.S. textile trade deficit with China rose by 25.3 percent to $17.5 billion in 2004 — 24 percent of the total textile deficit.

China's clothing exports to the United States have risen dramatically since some import quotas were reduced after China joined the World Trade Organization in 2001. In some categories, shipments have risen by more than 700 percent since then.

Textile manufacturing organizations have filed several petitions asking the U.S. government to invoke provisions in China's WTO accession agreement that were designed to “safeguard” U.S. manufacturers from being buried by tons of goods made with cheap labor in China.

The government's Committee for the Implementation of Textile Agreements has granted some petitions and was considering a dozen more when the New York-based U.S. Court of International Trade issued an injunction against further approvals at the request of U.S. importers.

Manufacturer groups have been urging the U.S. government to appeal the ruling so CITA can approve more safeguard petitions, which limit increases in specific categories to 7.5 percent of last year's total. “With the expiration of the remaining textile and apparel quotas at the beginning of the year, it is imperative for the U.S. government to invoke the special textile China safeguard before any further disruption to the U.S. market occurs,” said Tantillo.

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