GeoPilgrim

Textile quota restrictions no longer apply

For 2009 exports, textile quota restrictions no longer apply, though some nations are still excluded (Belarus, North Korea, Uzbekistan…, check the Harmonized Tariff Schedule!) The textile quota system as it was in effect in the past in the industrial nations officially ended in 2005 but certain restrictions continued until end of 2008.

TextileIn general the end of the textile quota restrictions in 2005 meant that textiles and textile products entering the U.S. from World Trade Organization countries were no longer subject to quota restrictions but as the direct impact has been job loss in developing countries as well as many lesser developed nations that suddenly found themselves unable to compete with the more competitive producers such as China and India, facing extremely high influx of cheap textile imports the US as well as many European governments imposed temporary restrictions on textiles and clothes imported namely from China since 2005. Although these restrictions were permitted under “safeguard” clauses, that China signed when it joined the WTO, it’s hard to say if they have been be discontinued for ever though the provisions ended in 2008.

Fact is that if Chinese imports will continue to flood western markets and many developing nations continue losing jobs, as has been the case in the current economic meltdown, and if the Chinese government will continue artificially undervalue its currency, which makes the cost of the Chinese goods low, some kind of restrictions may likely continue.

India, one of the largest textile exporters, was not a problem in the immediate post 2005 period, but as the dollar got weaker and rupee stronger Indian textile exports plummeted and India experienced tremendous loss in textile jobs despite not being curtailed by any quote system as was the case in the past.

Additionally, while the US and EU have proposed completely phasing out duty tariffs on textile and apparel imports by 2015, which will further perpetuate the likely dominance of the textile market by the big textile exporters like China and India, including a “Buy American” provision, which contained a specific “Buy American” section also with respect to textiles, it’s hard to say whether textile quota restrictions or textile tariffs will never be reinstated again. The best way to know what you may be facing as an importer is to check the Harmonized Tariff Schedule and always double-check with your customs broker before you buy, before you start spending any money on purchases, in order to be fully aware of what costs you may have to pro-rate into your landed costs of your purchases.

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