Contact:  Cass Johnson, 202-822-8025                                                                June 23, 2006 

Absent WTO Action on Textile Sectoral, New Trade Stats Confirm

China Will Take Over U.S. Apparel Market

China Now Controls Half of U.S. Market As Developing World Loses Billions

Millions of Jobs Threatened as Vital Export Markets Evaporate

Washington DC)  According to the most recent U.S. Commerce Department statistics (April 2006), China has now taken control of half of the U.S. apparel market in those product areas where quotas have been removed, with China’s share continuing to grow with each passing month.  As a result, the developing world has lost $3 billion in exports while China has gained almost $8 billion during the past four years.

The enormous losses by developing countries highlight the need for a textile sectoral solution to emerge out of the WTO talks next week.  Absent a sectoral solution, sharp reductions in tariff preferences and the disappearance of the China textile safeguard in 2009 will lead to millions of job losses around the globe.  Particularly hard hit will be African, Central American, Mexican and Andean workers as well as big Asian producers such as Sri Lanka, Bangladesh, the Philippines and Thailand.  One and half million jobs would be lost in Mexico, Central America and the Andean region alone with hundreds of thousands of additional textile job losses in the United States.

Share of U.S. Market – All Quota Free Apparel Categories ($ mil)
Country	2001	YE 4/2006	Change	Share,
				Apr-06
China	$4,725	$12,264	$7,539	49%
Rest of World	$16,868	$13,901	($2,967)	51%
- Bangladesh	$933	$760	-$188	3%
- CAFTA	$1,512	$797	-$715	3%
- Mexico	$1,045	$618	-$427	2%
- Philippines	$950	$639	-$311	2%
- Sri Lanka	$548	$469	-$79	2%
- Turkey	$402	$311	-91	1%
Source:  U. S. Dept of Commerce

In a review of apparel categories that have been quota free the longest – since 2002 - the results are even grimmer.  Every major supplier except India and Vietnam has lost large amounts of market share in the Untied States to China.  Other developed countries figures are similar.  China’s share of the Japanese and Australian apparel markets is now over 75 percent.  In the EU, in apparel categories where quotas have been removed since 2002, China’s share is now 74 percent.

 

U.S. Market Share,
Apparel Removed from Quota in 2002
	2002	YE April 2006
China	21%	65%
Rest of World	79%	35%
Bangladesh	5.7%	2.2%
CAFTA	9.2%	3.5%
India	2.9%	3.8%
Indonesia	4.7%	2.2%
Malaysia	1.6%	.6%
Mexico	6.4%	1.1%
Pakistan	2.9%	1.4%
South Korea	2.5%	1.8%
Sri Lanka	2.4%	1.4%
Thailand	7.4%	2.6%
Turkey	2.9%	1.0%
Vietnam	0.0%	2.9%
Source:  U.S. Dept. of Commerce; in sme.

The Doha Round talks are approaching a critical juncture next week as Ministers make another attempt to reconcile differences.  Cass Johnson, President of NCTO, explained: “A key question is whether the WTO will adopt a sectoral or whether it will decide to hand world textile and apparel markets over to China.  By adopting a sectoral, the WTO will be sending a message that it will defend textile and apparel jobs worldwide from China’s predatory pricing, currency manipulation and vast government subsidies.”

In apparel categories where China remains under quota, China’s share has been limited to eight percent of the U.S. market compared to China’s 65% share of the U.S. market in those products where quotas have been removed the longest (since 2002).  The apparel categories that remain under quota represent about $43 billion in U.S. imports or 60 percent of current U.S. apparel imports.  However, the quotas on China expire at the end of  2008 and cannot be re-imposed.  In addition, the U.S. textile industry is prohibited by WTO rules from taking dumping or countervailing duty cases against imports of apparel from China.   Thus a WTO solution on textile needs to include a new safeguard mechanism against China as well as to ensure that trade preferences enjoyed by more than 40 WTO member countries are not eliminated.  Both steps can only happen under a textile sectoral in the Doha Round.

Last week, 14 major textile and apparel exporting countries, including the United States, insisted that textiles receive special consideration by the WTO as part of the Doha Round.  At the same time, 44 U.S. congressmen sent a letter to Ambassador Schwab notifying the U.S. government that they would oppose any WTO solution that did not include an effective textile sectoral.

The combined U.S. textile and apparel sector still employs nearly one million workers in the United States.  The U.S. textile industry is the world’s third largest exporter, with more than $16 billion in textile exports last year.

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