For many years, the Government of Taiwan sent out a delegation to negotiate purchases of U.S. soybeans, corn, wheat and other commodities for the following year.
It was difficult to tell how much the Taiwanese actually bought, but they always made a big show of announcing how many millions of metric tons of this and that they acquired from their friends in the United States.
I was reminded of those announcements the other day when China said it would impose export taxes on some of the textile and apparel it has been shipping to the United States and European Union.
The move was aimed at lowering the tension between the countries in advance of the expiration of textile import quota on Jan. 1. Chinese is expected to increase its already significant share of the U.S. and EU textile markets after that date.
A U.S. Commerce Department spokesman said she wasn't prepared to comment because of the lack of details, including the size of the tax or the types of products.
Officials at China's Commerce Ministry said the tariffs would be based on quantity, not value. “We hope we can encourage the export of high-value products and further optimize the structure of China's textile export industry,” a spokesman said.
The Bush administration has already imposed safeguard provisions allowed under China's WTO accession agreement on four types of textile and apparel and is considering petitions for similar import restrictions on 10 other categories.
On Dec. 13, it also announced that shipments exceeding the remaining quota for 2004 would not be allowed into the United States in December as has been customary in previous years. Officials said some shipments could be landed in January.
Textile manufacturer representatives said the export tax announcement was part of a pattern they've come to expect.
“They announce an intention to do something, and, then six months later, it's difficult to figure out whether they've done it or not,” said the American Manufacturing Trade Action Coalition's Auggie Tantillo.
Even if they follow through on the tariffs, Chinese export prices are so low that it's doubtful the taxes will make much difference (as anyone who has ventured into U.S. clothing stores during the Christmas shopping season can attest).
“Even if this is legitimate,” it's not sufficient,” Tantillo says. “The Chinese have built-in advantage with unfair pricing schemes, undervalued currency and export subsidies. This appears to be more of a way to raise money for the Chinese government than to control exports.”
U.S. retailers, who have been fighting the safeguard petitions filed by U.S. manufacturers, said the export tax announcement indicated Chinese officials wanted a smooth transition.
They also accused the administration of being a Grinch by refusing to allow shipments in excess of quotas to be unloaded two weeks before Christmas. Maybe they should talk to the U.S. textile workers in North Carolina who were just notified their plants were closing, leaving them without jobs over the Christmas holidays.
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