U.S. Textile Prices could Rise

WASHINGTON -- When U.S. and Chinese textile negotiators sit down today, the administration's effort to help beleaguered American manufacturers could end up costing consumers some of the sweet deals they have been enjoying on clothing prices.

Some experts say America's clothing bill could rise by $6 billion or more annually if domestic producers get what they want -- a comprehensive deal limiting a broad array of Chinese imports.

Gary Hufbauer, a top trade expert at the Institute for International Economics, said the $6 billion estimate would translate into roughly $20 more on a U.S. consumer's annual clothing bill. But he cautioned that this could end up being a low estimate, given the tremendous impact Chinese imports have had in pushing clothing prices down in recent years.

"A comprehensive trade agreement would take the downward price pressure off not only for American producers but for other countries selling into the U.S. market," he said.

For the three months ending in June, clothing prices at the retail level were falling at an annual rate of 5.9 percent, reflecting in large part the surge in Chinese imports that has occurred since Jan.1, when a three-decade old system of global quotas was lifted.

American textile and clothing manufacturers contend that 19 textile plants have shut down this year because of the import surge and 26,000 jobs in textile and clothing plants have disappeared.

The administration has already re-imposed quotas on several key clothing categories, including trousers, shirts, underwear, socks and combed cotton yarn, with decisions scheduled to be made in coming weeks on a number of other categories, limiting growth in Chinese imports to 7.5 percent annually.

But the U.S. industry is pressing for a broader approach that would impose limits on import growth across all categories of products where Chinese imports threaten the U.S. industry. American manufacturers contend they won't settle for the deal the European Union reached in June because the growth that agreement allowed in imports -- up to 12.5 percent annually -- is too high.

"The EU agreement in our opinion was incredibly weak," said Missy Branson, a spokeswoman for the National Council of Textile Organizations, an industry group.

On the other side, American retailers, who like the low-priced imports, went to court last year in an effort to stop the quotas from being re-imposed. But now they say they would support a comprehensive deal if it allowed for growth in imports beyond the 7.5 percent cap, which has already been reached this year in several categories of Chinese imports.