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Customs Alert - US And China Reach Broad Textile Agreement

11.10.2005

The United States and China have reached an agreement that will allow the U.S. to control Chinese textiles entering the United States through 2008. Under the agreement, quotas will be placed on 34 products but will allow China to increase its overall exports to the U.S. by 3.2% over the next three years. Included in the products subject to quotas are trousers, underwear, and cotton knit shirts and baby socks. The new agreement also allows for certain Chinese imports that are currently stuck at U.S. ports, under the safeguards embargo, to be allowed into the country. In order to avoid the problem of over-shipping in the future, China will be permitted to borrow small amounts from their permitted quotas of future years and carryover a small percentage of unused quota from the previous year. The agreement’s provisions will apply to all exports leaving China on or after January 1, 2006.    

Following the end of the global quota system, Chinese exports into the U.S. increased by more than 50% to nearly $17.7 billion, during the first eight months of 2005. This prompted the U.S. to seek emergency safeguards protection, permitted under the terms of the WTO. Since these safeguards required renewal by the end of the year, the two countries felt it would be to their benefit to reach this agreement, whose 2008 expiration date coincides with the date at which the safeguard provision expires. The belief is that the breadth and length of time the agreement will be enforced will provide retailers and textile producers with the ability to plan ahead, giving them the stability and predictability that they have sought.  

Below is a chart listing the 2006 quota levels for goods exported from China on or after January 1, 2006. If you would like a copy of the full agreement, please contact us at the numbers listed above.  

Category Unit 2006 Level
200/301 – sewing thread/combed cot yarn kg 7,529,582
222 – knit fabric kg 15,966,487
229 – special purpose fabric kg 33,162,019
332/432/632 pt (plus baby socks) - T dp 64,386,841
sublimit 332/432/632 pt (plus baby socks) – B5 dp 61,146,461
338/339 pt – cotton knit shirts dz 20,822,111
340/640 – MB woven shirts dz 6,743,644
345/645/646 – sweaters dz 8,179,211
347/348 – cotton trousers dz 19,666,049
349/649 - bras dz 22,785,906
352/652 - underwear dz 18,948,937
359S/659S - swimwear kg 4,590,626
363 – pile towels no 103,316,873
666 pt – window blinds/window shades kg 964,014
443 – wool suits, MB no 1,346,082
447 – wool trousers, MB dz 215,004
619 – polyester filament m2 55,308,506
620 – other syn. filaments m2 80,197,248
622 – glass fabric m2 32,265,013
638/639 pt – mmf knit shirts dz 8,060,063
647/648 pt – mmf trousers dz 7,960,355
847 – sbvf trousers dz 17,647,255

 

The following products are not covered under the new agreement, and thus will not be subject to any quotas:   341/641 – women's and girls' cotton and man-made fiber shirts and blouses, not-knit 342/642 – women’s cotton and man-made fiber skirts 351/651 – men’s cotton and man-made fiber nightwear 634/635 – men's and boys' man-made fiber coats and women's and girls' man-made fiber coats  

If you would like additional information please contact: C.J. Erickson, (212) 790-9274 or Carl R. Soller, (212) 790-9231.

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