Answer Actively to Trade Protectionism

Since the beginning of this year, there have been 12 anti-dumping cases for Chinese textile and clothes products worldwide. Comparing to last year, the anti-dumping cases had not increase apparently, but the trade protectionism cases normally surge at the late half year, based on the experience

According to China Customs, the export of textile and garment reached 53.79 billion USD from Jan. to Apr. this year, up 15.55% from same period last year. Of which, the garment export were 32.19 billion USD, up 9.5%; textile 21.6 billion USD, up 26.1%.

With the recovery of export market, the international trade protectionism also turns to increase. In year 2009, the various trade protectionism cases for Chinese textile and garment products reached a historical high. Based on the record of Ministry of Commerce, there were 45 anti-dumping relative cases for Chinese textile and garment products worldwide, mainly involving in textile, chemical fibers and home textiles.

By the category of regions, nine cases came from India; Argentina eight cases; Turkey, the US, Brazil, Pakistan, five cases respectively; Peru, South Africa, two cases respectively; Ukraine, the EU, and South Korea, one cases respectively.

Since the beginning of 2010, there have been 12 anti-dumping cases for Chinese textile and garment products, mainly involving in Western countries. The US, four cases; the EU, three cases; Turkey, two cases; Mexico and Argentina, one cases respectively. The involved products included man s suits, demin, and synthetic fiber blanket.

Comparing to last year, the anti-dumping relative cases have not increased apparently, but the trade protectionism cases normally surge at the late half year, based on the experience. We should be careful for this situation.

Trade Protectionism Cases for Chinese Textile & Garment in First Four Months from 2008-2010

(Source: Ministry of Commerce)

Answer Actively, Maintain the Market Share

Anti-dumping is a major measure in trade protectionism. Some countries misused this measure to protect the interests of its native enterprises. Chinese textile and garment enterprises need to answer actively for those cases. One of the successful cases was Yama Ribbons & Bows.

On Feb. 6^th, American Ministry of Commerce announced the primary decision for the Chinese ribbons and rows anti-dumping and anti-subsidy cases. 15 Chinese enterprises participated in this investigation. Yama and Changtai Rongshu were chosen as the mandatory defendants for the anti-subsidy investigation enterprises; and Yama also was chosen as the mandatory defendant for anti-dumping investigation enterprise, with Ningbo Jintian. The primary judge turned to that Yama had not dump, and got free from punishment. The other enterprise did not defend itself and turned to take 231.04% punishing tax rate. Yama successful defended itself and avoid the punishing tax, while the other 13 enterprises had to accept the 115.70% tax rate. The US buyers cannot accept the tax more than 30%. This meant other Chinese ribbons and bows manufacturers were prohibited from the US market, except Yama.

Nevertheless, the defending procedure was difficult and burdensome. To prove its clear, the defendant has to submit a bunch of documents, including orders, proforma invoice, formal invoice, package list, delivery file, lading bill, as well the Customs declarations. All the data needs to cross check. A minor error might lead to failure. To win the primary judge, Yama had spent about two million RMB yuan. It was not small money for such a supplier.

While the success of Yama told us that the teamwork to defend itself would be the only way to protect its interest, when Chinese exporter had to fight back the trade protectionism. Giving-up defending means loser.

As a matter of fact, whether Chinese enterprise choosing to defend itself and the result had a demonstration effect for other countries.

Government Support to Fight Back Trade Protectionism

When meeting more and more trade protectionism cases, how to fight back is not a problem for the government, but also for the enterprise. For a long time, Chinese enterprises were declined to participate into the investigation of anti-dumping or anti-subsidy cases. They chose to accept passively. To fight back those cases, Chinese enterprise need to learn how to defend themselves to protect their share in international market, as well the position of their brands.

How could we avoid the anti-dumping and anti-subsidy investigations, and how could we answer it when it happened?

For the textile and garment exporter, first, we should avoid exporting to one particular country of some particular product in large volume and low price. Second, the enterprise need to pay attention to the industry situation of imported country and international market information, and made some necessary adjustment for the export quantity and prices. Third, to learn more knowledge of the laws, procedures and relative information of anti-dumping cases, and find some talents to deal with those cases.

For the government and associations, first, we need to make it clear that any way of trade protectionism is not acceptable. Second, the communication and dialogue between the industries of two sides could help to resolve the trade friction. The pre warning measures and monitoring are also necessary for some sensitive products.

Trade protectionism put Chinese textile and garment exporters into an unfair market environment in international competition. The industry upgrading is the only way to push Chinese textile industry from a manufacturing giant to a innovative giant. To improve the competitiveness of the products, we need to change the extensive development model into the energy-saving and emission-reducing, as well as the low carbon economy.