Testifying at a hearing called by the US Trade Representative to assess China's compliance with its World Trade Organization commitments, Cass Johnson, president of the National Council of Textile Organizations, said that unless the US government does something to combat China's "predatory export policies," US manufacturing cannot revive and be competitive.
Last year, the United States had a $37 billion textile and apparel trade deficit with China, and while it is off by some 5 percent so far this year, as a result of the economic recession, the textile trade deficit worldwide is down by 19 percent, including significant declines with Asian countries ranging from 90 percent with Hong Kong, 32 percent with Taiwan and 89 percent with Japan.
Johnson said that in the past 10 years, one in four manufacturing jobs in the United States has been lost, while Chinese exports to the United States have quadrupled.
He cited four areas he believes the US government should address in order to reverse that trend and strengthen the economy:
1. Since China uses its currency as an economic weapon, the US government should cite China as a currency manipulator and support legislation that allows US industry to defend itself and its workers against predatory practices.
2. The United States should condemn actions that China has taken since the global downturn in order to boost exports, including pumping $10 billion in new export subsidies into its textile sector by increasing export tax rebates by 40 percent.
3. The US government should develop a "comprehensive public database" covering China's laws and regulations in order to help the government and manufacturers better understand the Chinese trading system.
4. The US government should follow through on its commitment to monitor textile and apparel exports from China, particularly in those sensitive product categories that were removed from safeguard quotas last year.
