| With China's accession into WTO at the end of 2001, its textile and apparel exports have experienced very rapid growth thanks to the liberalization benefits of the third integration stage of Agreement on Textiles and Clothing (ATC). In 2003, its export volume topped USD 80 billion. Such an outstanding export performance aroused some major importers' big concerns. On November 17, 2003, the US announced its decision to apply the textile special safeguard mechanism contained in Paragraph 242 of "Report of the Working Party on the Accession of China" to Chinese dressing gowns, brassieres and knitting fabrics, hence triggering a new round of discriminative trade protection against Chinese textile and apparel exports. Based on the detailed analysis of the textile special safeguard clause and the problems in the US decision against Chinese three textiles, this paper points out that this special safeguard mechanism may pose another great threat to Chinese future textile and apparel exports. At the same time, it raises some suggestions of how to address this discriminative clause through the coordinative efforts from the government, the industrial associations and individual enterprises, hoping to provide some helpful insight for the industry's future smooth and sound development.The paper comprises six chapters. Chapter 1 mainly introduces the current export situation of Chinese textiles and apparel, especially the new problems arising from the soaring volumes and slumping export prices. Chapter 2 studies the overall legal frameregulating the global textile and apparel trade, including tariff and non-tariff barriers as well as the ten-year period of ATC. Compared with these legal restrictions, the textile special safeguard is more discriminative and much less strict in application standards and procedures.Chapter 3 to 5 are the focuses of this paper. Chapter 3 discusses the textile special safeguard clause from three different aspects. First, this clause deviates from WTO's aim of "promoting trade liberalization" and its basic principles, including the principles of "non-discrimination" and "prohibition of quantitative restrictions". Second, it conflicts with the ultimate purpose of ATC targeting at liberalizing the global textile and apparel trade since January 1, 2005. There are some big differences between the clause and the transitional safeguard mechanism stipulated in Art. 6 of ATC. Third, the WTO Safeguard Agreement has already worked out very detailed and strict standards to which a Member could resort when facing serious damage or threat caused by rapidly increasing imports. However, the textile safeguard not only just aims at China, but also greatly relaxes and lowers these standards such as application premise and conditions, investigation rules, restrictive methods as well as corresponding compensation and retaliation. The fourth section is the summary of the above-mentioned discussion. It emphasizes that the textile special safeguard clause is an "exceptional arrangement" under the WTO frame. Since it is still a part of WTO agreements, it has binding forces upon every WTO member, including China.Based on the example of US adoption of textile safeguard against Chinese three textiles, Chapter 4 introduces the US relevant domestic regulations, analyzes the real reasons underlining this action through a model of decision tree, and discusses the problems existing in its application process, including the unclear definition of several key concepts such as "market disruption", the doubtful qualification of applicants concerned and lack of persuasiveness of the proofs on which the final decision depended. It further points out that the US step will probably trigger the other WTO members' chain reactions, putting China into a more disadvantageous position in the future competition.Chapter 5 brings forward some specific suggestions of how to deal with the textilespecial safeguard mechanism from macro to micro levels. The government should strengthen its diplomatic efforts and take full advantage of WTO dis... |
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