05-10449. Announcement of Request for Bilateral Textile Consultations with the Government of the People's Republic of China and the Establishment of Import Limits for Cotton Knit Shirts and Blouses (Category 338/339); Cotton Trousers (Category 347/...

May 20, 2005.

AGENCY:

Committee for the Implementation of Textile Agreements (Committee).

ACTION:

Notice

EFFECTIVE DATE:

May 23, 2005.

FOR FURTHER INFORMATION CONTACT:

Ross Arnold, International Trade Specialist, Office of Textiles and Apparel, U.S. Department of Commerce, [phone]. For information on the quota status of these limits, refer to the Bureau of Customs and Border Protection website (http://www.cbp.gov),, or call [phone]. For information on embargoes and quota re-openings, refer to the Office of Textiles and Apparel website at http://otexa.ita.doc.gov.

SUPPLEMENTARY INFORMATION:

Authority: Section 204 of the Agricultural Act of 1956, as amended (7 U.S.C. 1854); Executive Order 11651 of March 3, 1972, as amended.

On May 23, 2005, as provided for under paragraph 242 of the Report of the Working Party on the Accession of China to the World Trade Organization (Accession Agreement), the United States requested consultations with the Government of the People's Republic of China with respect to imports of Chinese origin cotton knit shirts and blouses (Category 338/339); cotton trousers (Category 347/348); and cotton and man-made fiber underwear (Category 352/652). In accordance with paragraph 242 of the Accession Agreement and the procedures set forth by the Committee on May 21, 2003 (68 FR 27787), as clarified on August 18, 2003 (68 FR 49440), the United States is establishing limits on Chinese origin cotton knit shirts and blouses (Category 338/339); cotton trousers (Category 347/348); and cotton and man-made fiber underwear (Category 352/652), beginning on May 23, 2005 and extending through December 31, 2005 in order to assist in the implementation of these measures.

Paragraph 242 of the Accession Agreement allows World Trade Organization Members that believe imports of Chinese origin textile and apparel products are, due to market disruption, threatening to impede the orderly development of trade in these products to request consultations with the People's Republic of China with a view to easing or avoiding such market disruption. Upon receipt of the request, the People's Republic of China has agreed to hold its shipments to a level no greater than 7.5 percent (6 percent for wool product categories) above the amount entered during the first 12 months of the most recent 14 months preceding the month in which the request for consultations was made. Because this restraint period will be for less than 12 months, the restraint limit will be prorated to conform to the number of days remaining in the year, beginning on May 23, 2005. The Member requesting consultations may implement such a limit. Consistent with paragraph 242, consultations with the People's Republic of China will be held within 30 days of receipt of the request for consultations, and every effort will be made to reach agreement on a mutually satisfactory solution within 90 days of receipt of the request for consultations. If agreement on a different limit is reached, the Committee will issue a Federal Register Notice containing a directive to the Bureau of Customs and Border Protection to implement the negotiated limit.

Consistent with the terms of China's WTO Accession Agreement, these limits will only last through December 31, 2005. Therefore the 12-month notional limits, which are 7.5 percent above the amount entered during the first 12 months of the most recent 14 months preceding the month in which the request for consultations was made, are being prorated to correspond to the amount of days of the year covered by the restraint period. As they begin on May 23 and run through December 31, 2005, a period of 223 days, the notional limits will be prorated by a ratio of 223/365.

On April 8, 2005, the Committee solicited public comments on the self-initiated investigations request (70 FR 17978, 70 FR 17979, 69 FR 17980). This public comment period ended on May 9, 2005. The public comment period had also ended for the threat-based requests filed last fall covering the same three product categories (69 FR 64912, 69 FR 64034, 69 FR 64914). The Committee determined that imports of Chinese cotton knit shirts and blouses (Category 338/339); cotton trousers (Category 347/348); and cotton and man-made fiber underwear (Category 352/652), due to market disruption and the threat of market disruption, threatening to impede the orderly development of trade in these textile products, and that imports of cotton knit shirts and blouses (Category 338/339); cotton trousers (Category 347/348); and cotton and man-made fiber underwear (Category 352/652) from China play a significant role in the existence and threat of market disruption. A summary statement of the reasons and justifications for the U.S. request for consultations concerning imports of Categories 338/339, 347/348, and 352/652 from the People's Republic of China follows this notice.

A description of the textile and apparel categories in terms of Harmonized Tariff Schedule of the United States numbers is available in the CORRELATION: Textile and Apparel Categories with the Harmonized Tariff Schedule of the United States (see Federal Register notice 69 FR 4926, published on February 2, 2005). Information regarding the 2005 CORRELATION will be published in the Federal Register at a later date.

D. Michael Hutchinson,

Acting Chairman, Committee for the Implementation of Textile Agreements.

Committee for the Implementation of Textile Agreements

May 20, 2005.

Commissioner,

Bureau of Customs and Border Protection, Washington, DC 20229.

Dear Commissioner: Pursuant to Section 204 of the Agricultural Act of 1956, as amended (7 U.S.C. 1854); and Executive Order 11651 of March 3, 1972, as amended, you are directed to prohibit, effective on May 23, 2005, entry into the United States for consumption and withdrawal from warehouse for consumption of cotton knit shirts and blouses (Category 338/339); cotton trousers (Category 347/348); and cotton and man-made fiber underwear (Category 352/652), produced or manufactured in the People's Republic of China and exported during the period beginning on May 23, 2005, and extending through December 31, 2005, in excess of the following limits.

Category	Quantity
338/339	4,704,115 dozen.
347/348	4,340,638 dozen.
352/652	5,062,892 dozen.

Products which have been exported to the United States prior to May 23, 2005, shall not be subject to the limit established in this directive.

In carrying out the above directions, the Commissioner should construe entry into the United States for consumption to include entry for consumption into the Commonwealth of Puerto Rico.

The Committee for the Implementation of Textile Agreements has determined that these actions fall within the foreign affairs exception of the rulemaking provisions of 5 U.S.C. 553(a)(1).

Sincerely,

D. Michael Hutchinson,

Acting Chairman, Committee for the Implementation of Textile Agreements.

 

SUMMARY OF REASONS AND JUSTIFICATIONS FOR U.S. REQUEST FOR CONSULTATIONS WITH CHINA PURSUANT TO PARAGRAPH 242 OF THE REPORT OF THE WORKING PARTY ON THE ACCESSION OF CHINA TO THE WORLD TRADE ORGANIZATION

Cotton Knit Shirts and Blouses

Category 338/339

The United States believes that imports of Chinese origin cotton knit shirts and blouses are, due to the existence of market disruption, threatening to impede the orderly development of trade in these products. Further, the United States believes that imports of Chinese origin cotton knit shirts and blouses are, due to the threat of market disruption, threatening to impede the orderly development of trade in these products. Either finding supports a request for consultations with the Government of the People's Republic of China under Paragraph 242 of the Report of the Working Party on the Accession of China to the World Trade Organization (“Paragraph 242”). The following facts, and others contained in this Statement, support these beliefs:

 

U.S. Imports from China Are Increasing Rapidly in Absolute Terms. U.S. imports of cotton knit shirts and blouses from China were 2,816,081 dozens for the entire twelve months of 2004. In the first quarter of 2005, U.S. imports from China increased to 7,137,399 dozens, an increase of 1,277 percent from the first quarter of 2004 and over two and a half times the level of total calendar year 2004 imports from China.

 

U.S. Imports from the World Are Increasing Rapidly in Absolute Terms. U.S. imports of cotton knit shirts and blouses from all sources, excluding cotton knit shirts and blouses containing U.S. components that were imported under outward processing programs, increased from 58,343 thousand dozens in the first quarter of 2004 to 68,354 thousand dozens in the first quarter of 2005 - an increase of 17 percent. Approximately two-thirds of this increase was attributable to imports from China.

 

The Average Unit Value of Imports from China Is Falling in 2005. In 2004, the average unit value of U.S. cotton knit shirts and blouses imports from China was US$99.57 per dozen. In the first three months of 2005, the average unit value of those imports fell to US$39.88 per dozen, compared to US$44.38 per dozen for “rest of world” imports.

 

SUMMARY OF REASONS AND JUSTIFICATIONS FOR U.S. REQUEST FOR CONSULTATIONS WITH CHINA PURSUANT TO PARAGRAPH 242 OF THE REPORT OF THE WORKING PARTY ON THE ACCESSION OF CHINA TO THE WORLD TRADE ORGANIZATION

Cotton Trousers, Slacks and Shorts

Category 347/348

The United States believes that imports of Chinese origin cotton trousers, slacks and shorts are, due to the existence of market disruption, threatening to impede the orderly development of trade in these products. Further, the United States believes that imports of Chinese origin cotton trousers, slacks and shorts are, due to the threat of market disruption, threatening to impede the orderly development of trade in these products. Either finding supports a request for consultations with the Government of the People's Republic of China under Paragraph 242 of the Report of the Working Party on the Accession of China to the World Trade Organization (“Paragraph 242”). The following facts, and others contained in this Statement, support these beliefs:

 

U.S. Imports from China Are Increasing Rapidly in Absolute Terms. U.S. imports of cotton trousers, slacks and shorts from China were 2,184,056 dozens for the entire twelve months of 2004. In the first quarter of 2005, U.S. imports from China increased to 6,794,375 dozens, an increase of 1,573 percent from the first quarter of 2004 and over three times the level of total calendar year 2004 imports from China.

 

U.S. Imports from the World Are Increasing Rapidly in Absolute Terms. U.S. imports of cotton trousers, slacks and shorts from all sources, excluding cotton trousers, slacks and shorts containing U.S. components that were imported under outward processing programs, increased from 32,194 thousand dozens in the first quarter of 2004 to 38,844 thousand dozens in the first quarter of 2005 - an increase of 21 percent. Over 90 percent of this increase was attributable to imports from China.

 

The Average Unit Value of Imports from China Is Falling in 2005. In 2004, the average unit value of U.S. cotton trousers, slacks and shorts imports from China was US$154.53 per dozen. In the first three months of 2005, the average unit value of those imports fell to US$66.64 per dozen, compared to US$82.07 per dozen for “rest of world” imports.

 

SUMMARY OF THE REASONS AND JUSTIFICATIONS FOR U.S. REQUEST FOR CONSULTATIONS WITH CHINA PURSUANT TO PARAGRAPH 242 OF THE REPORT OF THE WORKING PARTY ON THE ACCESSION OF CHINA TO THE WORLD TRADE ORGANIZATION

Cotton and Man-Made Fiber Underwear

Category 352/652

The United States believes that imports of Chinese origin cotton and man-made fiber underwear (“underwear”) are, due to the existence of market disruption, threatening to impede the orderly development of trade in these products. Further, the United States believes that imports of Chinese origin underwear are, due to the threat of market disruption, threatening to impede the orderly development of trade in these products. Either finding supports a request for consultations with the Government of the People's Republic of China under Paragraph 242 of the Report of the Working Party on the Accession of China to the World Trade Organization (“Paragraph 242”). The following facts, and others contained in this Statement, support these beliefs:

 

U.S. Imports from China Are Increasing Rapidly in Absolute Terms. U.S. imports of underwear from China were 5,211,785 dozens for the entire twelve months of 2004. In the first quarter of 2005, U.S. imports from China increased to 5,252,622 dozens, an increase of 318 percent from the first quarter of 2004.

 

U.S. Imports from the World Are Increasing Rapidly in Absolute Terms. U.S. imports of underwear from all sources, excluding underwear containing U.S. components that were imported under outward processing programs, increased from 28,468 thousand dozens in the first quarter of 2004 to 32,770 thousand dozens in the first quarter of 2005 - an increase of 15 percent. More than 90 percent of this increase was attributable to imports from China.

The Average Unit Value of Imports from China Is Falling in 2005. In 2004, the average unit value of U.S. underwear imports from China was US$31.46 per dozen. In the first three months of 2005, the average unit value of those imports fell to US$15.68 per dozen, compared to US$15.80 per dozen for “rest of world” imports.