U.S. slashes quota on Chinese imports

January 07, 1994|By New York Times News Service

WASHINGTON -- The Clinton administration yesterday cut by more than $1 billion the amount of clothing and fabrics China can export to the United States in retaliation for what it said were attempts by China to get around U.S. limits on imports by shipping goods into the United States through other nations.

U.S. apparel manufacturers quickly welcomed the administration's punitive action, since it will slightly curb China's ability to compete with U.S.-made goods and possibly save some jobs.

But some U.S. retailers complained that consumers could face shortages and higher prices, particularly low-income shoppers who might depend on some of these illicit Chinese sweaters, knit shirts and cotton trousers. The retailers urged the administration to negotiate a settlement with Beijing.

A spokesman for the Gap, which buys about 2 percent of its apparel from China, threw in a caveat.

The cutback, he said, will strain capacity at apparel factories elsewhere in East Asia -- particularly Hong Kong -- "and that will lead to higher prices for the consumer."

All told, U.S. retailers purchase about 6 percent of their clothing from China, according to the Johnson Redbook Service, a retail research organization.

Because the punitive measure will not take effect until Jan. 17, there is a chance that the United States and China will come to an understanding that would better control or limit illicit Chinese exports. According to one government estimate, about $2 billion of Chinese textiles and apparel is evading U.S. import quotas each year.

U.S. Trade Representative Mickey Kantor announced the decision at a news conference. It will take effect two days before Treasury Secretary Lloyd Bentsen arrives in Beijing for trade talks with Chinese leaders.

Mr. Kantor said import quotas from China would be reduced by 25 percent to 35 percent in 88 categories of clothing, cloth and other products.

Mr. Kantor said U.S. officials had been monitoring the Chinese exports for some time and had been trying to persuade China to resume negotiations with the United States on an agreement for tighter controls and stiffer penalties to limit illicit exports.

But Beijing refused this week to resume talks aimed at such an agreement, which the United States now has with 16 other major export ing countries.

In foreign policy terms, the move underscores the degree to which China is gradually challenging Japan as the biggest trade headache for the United States, as well as the extent to which U.S.-Chinese frictions are now as much over trade abuses as human rights abuses.

In domestic policy terms, the move is a gesture by the Clinton administration to U.S. textile manufacturers, who have been chafing over the fact that the administration did not win them the protection they were seeking in the recently concluded global trade agreement.

Mr. Kantor said that U.S. Customs Service investigators had found that Chinese fabrics and clothing had been illegally shipped to the United States through at least 25 other countries. In one case, he said, 3.6 million sweaters were shipped from China to neighboring Macao, a Portuguese territory next to Hong Kong with a population of only 475,000. The Chinese sweaters were relabeled "Made in Macao," Mr. Kantor said, and then shipped.

The administration, apparently in an effort to soften the impact on China of the textile quota cut, is also planning to lift its ban on the sale of two broadcast satellites built by Martin Marietta Corp. in return for Beijing's agreement to enter discussions with the United States about its exports of missiles and other weapons, officials said.

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