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Follow-Up:
Textile floodgates closing slightly
In May, 2005 I talked about the removal in
the US of certain textile quotas from WTO countries. As you
might recall, the predictions were that all hell would break
loose in the absence of annual quotas which had previously
placed limits on the quantities of textile products foreign
countries were allowed to export to the US. Most experts felt
that China would flood the US market with cheap clothing,
followed closely by India.
Last month, with the US textile industry screaming
bloody murder, the US government announced it was reinstating
limits on imports of certain textile goods (like denim jeans
and cotton T-shirts) in the face of a huge surge in exports
from (drum roll please): China. Using a WTO guideline that
allows for limits on Chinese goods in extreme cases, the US
has once again installed quotas on key textiles. The US textile
industry wants more protection, but for now the US seems to
have put a finger in the dike to at least slow the dramatic
increase in Chinese fabric products.
Ultimately this will mean that in the third
quarter of this year, US wholesalers will need to look beyond
China to fulfill orders for the busy Holiday season. China
will have filled the quotas by that time and some larger importers
like Walmart will need to obtain goods elsewhere. This will
not be difficult, nor will it add much in terms of cost of
goods, but it will mean that the Chinese will continue pushing
hard in the WTO to have the limits removed. Should be interesting
to see how things turn out.
For more on this, click here.
(This
article written by Mike McGinnis and published originally
on indiasilver.com.
We allow republication provided the piece is copied in its
entirety with links and attribution.)
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