California Apparel News

China maintained a strong lead as the No. 1 supplier of textiles and apparel to the United States. Chinese imports grew almost 25 percent during the first 10 months of 2004.

Textile and apparel imports from China reached $15 billion, compared with $12 billion during the same time period in 2004. China controls about 15 percent of the U.S. apparel import market.

Mexico came in a distant second with $7.2 billion in textile and apparel exports to the United States, a 3.2 percent decline from 2003.

As a region, the Caribbean Basin—which includes Guatemala, El Salvador and the Dominican Republic—maintained its share of the U.S. textile and apparel import scene, exporting $8.1 billion in textile and apparel to the United States. That was a nearly 2 percent decline from 2003.

With its cheap and abundant work force, China has become the favorite manufacturing site for apparel companies and retailers trying to keep prices low as they compete with retail giants such as Wal-Mart Stores Inc. and the Target Corp.

With apparel and textile quotas expected to disappear on Jan. 1, 2005, economists predict that China will dominate at least 50 percent of the U.S. apparel market within the next few years.

The Bush administration, however, is considering imposing temporary quotas, or safeguard measures, on nine categories of apparel, including cotton pants, dressing gowns and knit shirts.

In addition, the Chinese government recently announced it will impose tariffs on some textile exports to sidestep a trade war with the United States and the European Union over cheap Chinese apparel.

The Chinese government did not state to what extent they will tax goods or which textiles will be affected. But officials did say the tariffs will encourage Chinese manufacturers to make higher-end textiles and avoid making cheaper textiles that would be used in items such as T-shirts.

The Caribbean Basin countries are still hoping that Congress will approve the Central American Free Trade Agreement, signed by the Bush administration last May. CAFTA would eliminate tariffs and trade barriers for most products, including apparel and textiles.

The Bush administration is also working to have Iraq and Afghanistan admitted to the World Trade Organization, whose 148 members will enjoy reduced tariffs and fewer trade restrictions in 2005. While talks are scheduled to begin next year, it could take years for the two countries to become members. It took 15 years of talks before China was admitted to the WTO in 2001.

—Deborah Belgum