COMMITTEE FOR THE IMPLEMENTATION OF TEXTILE AGREEMENTS (CITA)
ANNOUNCES THAT IT WILL INVOKE SAFEGUARDS
ON TEXTILE IMPORTS FROM CHINA

The Committee for the Implementation of Textile Agreements (CITA) today announced affirmative decisions in three self-initiated textile safeguard cases that were instituted in April 2005. The 30 day comment period for these self-initiated cases ended on Monday, May 9. CITA also reached affirmative determinations today on three threat-based requests for safeguard relief covering the same products for which it was enjoined from considering until April 27, 2005.

CITA today determined that the U.S. market for cotton knit shirts and blouses (Category 338/339), cotton trousers (Category 347/348), and cotton and man-made fiber underwear (Category 352/652) is being disrupted and that there is a threat of further disruption. CITA further determined that imports in these categories from China play a significant role in the existence and threat of market disruption, and that this situation threatens to impede the orderly development of trade in these products.

"Today CITA announced its decision to invoke textile safeguards based on market disruption and threat of market disruption due to the magnitude of increases in textile imports from China and China's significant capacity to increase production and exports to the United States in these product categories," said Commerce Secretary Carlos Gutierrez. "Today's action by CITA demonstrates this Administration's commitment to leveling the playing field for U.S. industry by enforcing our trade agreements. We will consult with the Chinese to find a solution that will permit the orderly development of trade in a quota free environment."

In addition to the three self-initiated textile safeguard cases that CITA decided affirmatively today, there are currently four cases pending before CITA, for which the public comment period has closed. These four additional cases were initiated by CITA last fall in response to industry requests alleging a threat of market disruption. CITA is working vigorously to complete its analysis of the facts at issue in those cases and will issue its determinations on the merits of those cases as expeditiously as possible.

Next Steps: CITA will request consultations with China by the end of May with a view to easing or avoiding market disruption. Consultations must be held within 30 days of receipt of the request by the Chinese government. The United States will make every effort to reach a mutually satisfactory agreement with the Government of China to ease or avoid the disruption in the U.S. market for these three product categories within 90 days of such request. In the event a mutually satisfactory agreement cannot be reached by the conclusion of the consultations period, the quota will remain in place through the end of 2005.

Background: On April 4, 2005, CITA announced its decision to initiate safeguard proceedings on several categories of product to determine whether imports of these Chinese origin apparel products were contributing to the disruption of the U.S. market in accordance with the textile safeguard provision in China's Accession Agreement to the World Trade Organization. The decision was made to initiate the reviews based on substantial increases in imports of these products from China over the first quarter of this year, following the removal of textile quotas under the World Trade Organization as of January 1. The 30 day comment period for this review ended May 9, 2005.

On May 5, 2005, CITA announced the resumption of consideration of twelve requests for safeguard action, based on the threat of market disruption, that were received from certain textile and apparel trade associations in October, November and December 2004. The requestors asked CITA to limit imports from China of twelve textile and apparel products in accordance with the textile safeguard provision in China's Accession Agreement to the World Trade Organization. CITA decided to consider these requests and solicited public comments. On December 30, 2004, the U.S. Court of International Trade preliminarily enjoined the CITA agencies from considering or taking any further action on these requests and any other requests "that are based on the threat of market disruption". The Court of Appeals for the Federal Circuit stayed the injunction on April 27, 2005. Cotton knit shirts and blouses (Category 338/339), cotton trousers (Category 347/348), and cotton and man-made fiber underwear (Category 352/652) are three of the products at issue in the threat-based proceedings pending before CITA.

For more information, please visit: http://otexa.ita.doc.gov

COMMITTEE FOR THE IMPLEMENTATION OF TEXTILE AGREEMENTS (CITA)

he Committee for the Implementation of Textile Agreements (CITA), an interagency group chaired by the Department of Commerce, is responsible for matters affecting textile trade policy and for supervising the implementation of all textile trade agreements.

CITA is comprised of the Departments of Commerce, State, Labor, and Treasury and the Office of the U.S. Trade Representative's Office. CITA is chaired by the Commerce Department's Deputy Assistant Secretary for Textiles and Apparel. The Commerce Department's Office of Textiles and Apparel (OTEXA) provides the staff support for the Committee, monitors all agreements and provides economic analysis and relevant data upon which the Committee relies in taking action