California Apparel News

China has overtaken Mexico as the main source of apparel and textile imports for the United States, growing 33 percent during the first three quarters of 2003 while Mexico’s imports dropped 5.27 percent.

China’s imports grew to $12 billion during the first nine months of this year compared to $9 million for the same period last year.

China will make even more inroads into America’s world of apparel and textile as it gears up for 2005, when trade barriers tumble for World Trade Organization members.

The only thing that may put a damper on Chinese imports are sector-specific safeguards enacted by the Bush administration in November to cap imports of knit fabric, bras and dressing gowns. Under WTO provisions, the United States can impose temporary restrictions, limited to 7.5 percent above the previous year’s levels, if imports from goods threaten the U.S. markets. However, the United States is required to enter into negotiations with China to try to find a solution within 90 days of imposing the restrictions. If that fails, the safeguards go into effect.

Traditionally, Mexico has been the United States’ major supplier of imported apparel and textiles, a position the country has gradually filled when the North American Free Trade Agreement was initiated 10 years ago.

But hourly wages for Mexican apparel workers, which average $2 an hour, are now four to 10 times more than those of Chinese workers. As retailers search out cheaper apparel, China has been the go-to country for rock-bottom prices.

Consequently, Mexico’s imports to the United States inched down to $7.4 billion during the first three quarters of 2003, a 5.27 percent drop from the same period last year.

Meanwhile, apparel and textile imports from the Asian countries that are members of the Association of Southeast Asian Nations (ASEAN) grew 23.8 percent during the first three quarters of this year to $9.5 billion compared to $7.49 billion the same period last year. Countries that make up ASEAN include Vietnam, Cambodia, Indonesia, the Philippines and Thailand.

Textile and apparel imports will only grow as various free-trade agreements are worked out between the United States and other regions around the world.

Trade negotiators for the Bush administration have wrapped up talks to create a Central American Free Trade Agreement that could go in effect as early as next year if approved by Congress.

After establishing a free trade agreement in late 2002 with Chile, U.S. trade negotiators are now talking with other South American countries in hopes of establishing a free-trade zone that would stretch from Alaska to Argentina. It would be called the Free Trade Area of the Americas (FTAA). Negotiations are to be concluded no later than January 2005.

As imports from China have increased, so too have U.S. exports of apparel and textiles to that country. U.S. exports to China in those categories grew 32 percent during the first three quarters of this year, totaling $183 million compared to $138 million during the same period last year.

—Deborah Belgum