Customs Alert - US And China Reach Broad Textile Agreement
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.