Looks like we have reached a deal with China regarding textiles:
The U.S. and China signed a deal Tuesday limiting imports of Chinese clothing and textile products into the United States, ending three months of negotiations over the thorny issue.
U.S. Trade Representative Rob Portman and Chinese Commerce Minister Bo Xilai both described the deal as a “win-win” following a final round of talks here, but Bo later added that it was a “far cry” from China’s original expectations…
Auggie Tantillo, executive director of the American Trade Action Coalition, another industry group representing textile and clothing manufacturers, said, “U.S. textile and apparel manufacturing workers and their communities are big winners today. This bilateral agreement represents a necessary and welcome step towards addressing China’s unfair trade practices and highly disruptive levels of trade.”
But representatives of American retailers expressed disappointment with what they saw as overly restrictive limits on future imports.
“Instead of terms that ensure that there is a true transition to unrestricted trade after 2008, the agreement imposes tight quotas on the products of greatest importance to American families: shirts, pants and underwear,” said Laura E. Jones, executive director of the U.S. Association of Importers of Textiles and Apparel.
Bo said the agreement was concluded after “practical and equal negotiations” and provided a “predictable and stable environment” for the textile industries in both China and the United States.
I have not been following this issue, and I do not know if these negotiations were the result of China ‘dumping’ subsidized textiles, or what the background is. If you have any information, pass it on, please.
Mr Furious
Forty-five minutes and no takers? None of us knows anything about it or nobody cares…which is better/worse?
Krista
In my case, it’s the former. Now, if you want to talk softwood, I’ll be all over that.
RonB
This is a good thing, from the looks of it. We don’t have to share our markets indiscriminately with dumpers and centralizers who subsidize their industries. Quotas are definitely the answer.
Now if only we could do the same thing for the car industry…
docG
Trade with China, my ass! China is a tyrannical dictatorship WITH WEAPONS OF MASS DESTRUCTION!!!! They have provided weapons, money and aid to terrorists. A direct threat to America. Let’s invade China and set up the democracy the people want! We will be greeted as liberators!!
Oh, sorry. That was the plot to a show on a different channel. Anyone see how that series ended?
Steve S
Sounds like protectionism, frankly.
Republicans are afraid of losing seats in North Carolina again or something like that. Sigh.
Frank
I have not even heard any allegations that China is dumping. Nor are their exports subsidized. American textiles have been protected for years and Bush promised them more protection for North Carolina’s electoral votes.
RonB
Then apparently you aren’t listening:
Nice trashing American industry just to take a swipe at Bush. Be proud.
Tim Worstall
Here’s the history.
The Multi-Fibre Agreements started in the mid 1970s. Quotas on clothing (lots of different types) from each to every country.
Due to wind up Jan 1 2005. 30 odd years should be enough for industries to adapt, right?
Jan 1 2005. As planned, quotas abolished. Imports from China surge.
Under the accession terms for China to the WTO there was a provision that if this happened, importing countries can impose temporary quotas with a maximum life of three years to enable industry to adapt.
These agreements can last until 2008 maximum. After that they’re illegal.
Both the EU and now, as above, the US have done just that.
Net effect? Lots of poor people in China get kicked out of the textile factories. A few rich people in the US and Europe get their jobs protected for three years.
All consumers in the US and the EU pay more for their clothing for three years.
And will US industry adapt in three years when they didn’t for 30?
Nah, just the usual story of protectionism. The consumer gets screwed in favour of the special interests.
In the EU case it was 180,000 textile workers got to make clothes more expensive for 450 million people. Great deal hunh?
Krista
Tim Worstall…wow…that’s really good to know. Thanks. So what’s your take on the US/Canada softwood dispute? More of the same idea, or something altogether different?
Tim Worstall
The softwood thing I’m not really up on. All I really know is that (can’t remember if it’s NAFTA or WTO) every time it gets near a courtroom or arbitration then the US loses.
As an out and out free trader (no quotas, no tariffs, no restrictions, ever!) here’s my read of the basic case.
The US claims that Candian loggers are subsidized by the Crown Agents (ie, the Canadian Govt who own most of the forests) because they don’t charge them enough for the right to cut the trees. This is therefore unfair competition and there should be tariffs to protect US forestry companies.
This entirely misses the point. If the Canadians are in fact doing this then this is a subsidy from the Canadian taxpayer (who are not getting the proper, higher, logging fees) to the US consumer (who gets cheaper softwood and thus cheaper houses etc).
Now normally, if a foreign government comes along and says “We’d like to give your citizens free money” then you’d think that people would say “Great! Send it on over!”
In fact, it’s what all economists say. If foreigners are dumb enough to subsidize the things they sell you, so that you get them cheaper, well, they’re simply dumb and you should take advantage of them.
Trade really isn’t rocket science. It’s imports that make you richer and if people are stupid enough to pay their taxes to reduce their price and thus make you even richer, well, take it.