New Trends In The Protection Of International Textile Trade

In 2010,

General safeguard measures

Both Turkey and Indonesia are

In January 13, 2011, the Turkey government announced that it would implement safeguards for imported shuttle fabrics and garments from the world to increase import tariffs.

The case involved 2258 Chinese enterprises and the amount involved amounted to US $830 million. This is the largest case in China's textile trade protection in recent years.

The case has attracted the attention of the Fair Trade Bureau of China's Ministry of Commerce and the China Textile Import and Export Chamber of Commerce.

The textile chamber of Commerce promptly informed the enterprise that the questionnaire was filled out and the responding meeting was held.

With the support of the enterprises, the textile chamber of Commerce represented the industry in the Turkey hearing and submitted the defense opinions.

Under the pressure of international and domestic dual opposition, the local government issued a notice on the implementation of Interim Measures in March 24th, which lowered the initial tax rate and set aside a buffer period, and decided to levy taxes 120 days later.

At present, the case is still in progress.

In March 23rd this year, the Indonesian government announced that tariffs on some cotton woven fabrics were taxed for 3 years.

The case involved my export volume, although not high, only 55 million 930 thousand dollars, involving 226 enterprises, but still attracted the attention of the Chinese side.

In 2010, the China ASEAN free trade area was formally established, and all the products involved were just zero tariff products. Just 1 years after the operation of the FTA, Indonesia proposed tariff increases, which set a bad precedent for ASEAN countries.

It is worth mentioning that the two cases have adopted general safeguard measures, and the protection mode of textile trade against China has entered the third stage.

Reviewing the history, we can see that China's textile exports encountered three stages of trade protectionism.

Stage I: quota management before 2005.

According to the agreement on textiles and clothing (ATC), the United States, the European Union, Canada and Turkey have implemented quota quantity management of China's major textile and garment imports, and have been monitoring bilateral quotas.

The second stage: in 2005 ~2008, the developed countries implemented special safeguard measures and the number management of unilateral imports by developing countries.

After the integration of global textile trade in 2005, quota management was abolished. The developed countries such as the United States and the European Union made investigations according to the provisions of special safeguard measures in China's accession to the WTO. In order to resolve trade frictions, China and the United States and the European Union signed the memorandum of understanding on certain textile and garment agreements respectively, and China carried out export volume management for some textile and apparel.

Developing countries such as Turkey, Brazil and South Africa impose import volume management on some textile and garment imports from China.

The third stage: general safeguard measures were implemented in developing countries in 2011.

The biggest difference between the general safeguard measures initiated by Turkey and Indonesia for imported textiles and quota management and special safeguard measures is: first, not only against China, but against global suppliers; two, it is not limited to adopting quantitative restrictions, but more inclined to adopt the method of increasing tariffs to restrict imports; three, the implementation period is different, and the period of validity of the special safeguard measures in the 242nd paragraph of the report of China's accession to the WTO and the sixteenth article of China's Accession Protocol expires at the end of 2008 and the end of 2013 respectively, while the general safeguard measures do not have such a restriction.

Reasons for initiating cases

The general safeguard measures are derived from the provisions of the nineteenth articles of GATT1994 and the WTO safeguards agreement, and each country initiates the investigation procedure according to its own safeguards act.

The measure is mainly absolute or relative increase in quantity of imported products compared with domestic production, and can only be initiated when serious damage or serious damage is caused to domestic industries producing similar or directly competing products.

From the above two general safeguard measures initiated by Turkey and Indonesia, the two cases are mainly fabrics and some clothing products.

The Turkey limited products introduced in the shuttle woven cloth involves 13 tax numbers, clothing 20 Tax numbers, Indonesia put forward 11 restrictions on products woven cotton products.

According to Chinese customs statistics, in 2010, China exported $830 million to Turkey's exports, of which $560 million was exported from woven fabrics, 270 million from clothing exports, and 55 million 930 thousand US dollars from Indonesian woven cotton fabrics.

Developing countries such as Turkey and Indonesia, because of insufficient production capacity, import large quantities of fabrics from the world to meet the needs of domestic garment processing every year. China is the most important supplier of fabrics.

However, the rapid growth of imports has also caused the dissatisfaction of domestic textile manufacturers, and with the influence of political factors at home and abroad, the two countries have introduced measures to protect the interests of their own enterprises.

The tax time in Indonesia is 3 years.

Turkey is currently adopting temporary safeguards and has not yet stipulated the implementation period.

China is the largest supplier of textiles and clothing in Turkey and Indonesia, and is also the most affected by these safeguards.

Authoritative data show that in 2010, Turkey imported textiles and clothing from China for 2 billion 395 million US dollars, an increase of 58.02%, accounting for 25.79% of Turkey's market share, an increase of 3.73 percentage points compared to the 2009 share.

In the same period, Turkey's imports from Bangladesh, India, Vietnam and South Korea also increased rapidly, up 59.01%, 43.83%, 57.63% and 39.79% respectively.

In January 2010 ~11, mainland China ranked first in Indonesia's textile and clothing imports, reaching 1 billion 475 million US dollars, an increase of 58.53%, accounting for 36.08%.

Over the same period, Indonesia's imports increased by 45.19%, 36.73% and 60.34% from South Korea, China, Hongkong and Vietnam.

The data show that the rapid growth of imports from the globe has made Turkey and Indonesia target not only China but also global suppliers.

How should Chinese enterprises cope?

In recent years, most of the surveys on general safeguard measures have been made in developing countries.

Since 2010, the number of cases of general safeguard measures against textiles has increased and scale has escalated.

From the perspective of the implementation of general safeguard measures, it is possible to adopt quantitative restrictions or impose tariffs. Considering the cost of implementation and other factors, most sponsors adopt the additional tax law.

On the implementation time, the implementation time of general safeguard measures should not exceed 4 years, and can be postponed under special circumstances, but the longest can not exceed 8 years. The longest period of implementation in developing countries is 10 years.

General safeguard measures are a legal issue. Safeguards surveys include initiation, investigation procedures, interim measures and final rulings.

There are many irregularities in the investigation of safeguard measures in developing countries. However, if we can conscientiously respond positively, submit timely defense opinions, convey the voice of the Chinese side, and strengthen negotiations between the governments, we can also affect the final ruling of the sponsors.

Therefore, giving full play to the respective advantages of the government, chambers of Commerce, local enterprises and enterprises has become the key to joint response to general safeguard measures.