Although a future deal cannot be written off between China and the US, uncertainty and confusion is playing upon the minds of US buyers regarding the possibility of quota measures and options other than China for supplies.
The impact of embargoes in merged category 338/339 (men's and women's cotton knit shirtsn, including T-shirts) has been considerable to China having now completely fallen off the list of top suppliers during late summer.
Imports into the US amounted to 20.5 million dozen this year before grinding to a virtual halt after the imposition of embargoes on 5 July 2005.
During the year, China was able to slash prices making its mass produced apparel almost irresistible to US retailers.
With a 58 per cent reduction in prices, it outmatched similar moves from rival suppliers in other countries such as India who managed to cut prices by a little over 26 per cent.
This was before embargoes. Since July, other countries have risen above the surging China in the list of top US suppliers as retailers and importers started the hunt for alternative suppliers.
Topping the list by the end of September were Central American countries that have so far fended-off Asian competition.
Honduras sent nearly 27 million dozen men's cotton knit shirts (category 338) to its neighbour in North American during the three quarter period of 2005.
This still sees a fall of 5 per cent in volume terms compared to the same nine months of 2004.
Crucially however, its imports in the months of September are actually 9 per cent higher than the previous September indicating an increased interest from US buyers.
El Salvador has picked up from last year increasing shipments by 7 per cent and is currently the second largest supplier to the US, above Mexico in third which has seen shipments falling up until, and including, September.
Pakistan is the leading Asian supplier so far this year shipping 9.4 million dozen to the US.
Increasing shipments in September 2005 by 56 per cent against the same month in 2004, and 20 per cent during 2005, it seems to be benefiting from the Chinese loss.
A similar picture in the women's category (339) shows Guatemala leading the pack with 19 million dozen shirts shipped during January to September.
Overall, the country increased exports to the US by 10 per cent this year although only a 1.6 per cent increase in September as against September 2004.
Mexico, second overall in this category for 2005, pushed ahead of Guatemala in shipments for the month of September with Honduras third.
Hong Kong, the top Asian supplier in this category, surged, shipping over 150 per cent more in September probably due to rerouting of exports from mainland China.
World prices in both categories fell in 2005 by 4.52 per cent, pushed on by the price war especially with China slashing prices by 58 per cent.
Geographical proximity accounted for price differences with would be CAFTA members in Central America offering prices below $30 per dozen.
Central American prices were around $10 cheaper than the world average.
India had reduced prices dramatically by 26 per cent but remained higher than the $32.57 world average.
Pakistan and Vietnam offered $37 and $42 respectively.
Lately, several US industry organisations such as the National Council of Textile Organizations, have been bombarding the US government with petitions to either request investigations in certain categories or to re-impose quotas on existing products already covered by safeguard measures.
The latter is the case for categories 338/339 with the industry hopeful that the Committee for the Implementation of Textile Agreements (CITA) will re-impose safeguard measures on all existing cases on 1 January 2006.
The calculation, in accordance with WTO rules, limits growth at a 7.5 per cent ceiling and is calculated over a period of 12 months during the last 14 months before the request was submitted.
In this case, the calculation will be based on exports of the twelve months up until the end of November which will total around 21.5 million dozen.
Adding the 7.5 per cent permitted growth rate, the total quota for 2006 should be limited to around 23 million dozen.
