China says, U.S. violates the spirit of free trade and principles of WTO

The Bush administration, reacting to a flood of Chinese clothing imports since January had announced the imposition of safeguards to curb Chinese textile, escalating simmering trade tensions.

In a statement released Saturday, Chinese Commerce Ministry spokesman Chong Quan said the U.S. move “violates the spirit of free trade and the basic principles of the World Trade Organization.”

China has already warned the US and Europe that it will resist any attempt to limit its textile and apparel exports. China indicated it would take further action under the framework of the WTO. The European Union is also seeking to implement similar quotas against China.

But pressure was building on the US administration to slow Chinese imports even before the global textile quota system ended on January 1.

The US government’s committee for the implementation of textile agreements (CITA) re-imposed quota on Chinese imports of cotton knit shirts and blouses, cotton trousers, and cotton and man-made fibre underwear. The US government will now request formal consultations with Beijing, but the quota will be imposed regardless by the end of May, officials said.

“Today’s action by CITA demonstrates this administration’s commitment to leveling the playing field for US industry by enforcing our trade agreements,�? commerce secretary Carlos Gutierrez said in a statement. “We will consult with the Chinese to find a solution that will permit the orderly development of trade in a quota-free environment,�? he said.

CITA was acting partly on its own initiative and partly in response to complaints from US textile manufacturers, angry that Chinese imports have shot up ever since trade-regulatory global quotas were scrapped on January 1.

Retailers had gone to court to block new quotas, arguing that they would raise the prices of clothing for American consumers.

Since January 1, the prices of imported Chinese apparel have dropped as the volume has increased. The quotas will take effect when the administration notifies China of its decision and discussions are held about the size of the limits.

“The US will make every effort to reach a mutually satisfactory agreement with the government of China to ease or avoid the disruption in the US market for these three product categories within 90 days (of launching consultations),�? the committee said in the statement.

“In the event a mutually satisfactory agreement cannot be reached by the conclusion of the consultation period, the quota will remain in place through the end of 2005,�? it warned.

The American textile industry petitioned the administration to slow the surge of the imports, asking it to invoke clauses in the agreement it signed with Beijing when China joined the WTO.