NCTO Applauds USTR for Confronting China on Illegal Export Subsidies

February 11, 2015

NCTO Applauds USTR for Confronting China on Illegal Export Subsidies

Washington, D.C. – The National Council of Textile Organizations (NCTO) applauds U.S. Trade Representative Ambassador Michael Froman’s decision to pursue dispute settlement consultations with the Government of China at the World Trade Organization (WTO) concerning China’s “Demonstration Bases-Common Service Platform” export subsidy program. (Ambassador Froman’s press release linked here)

Through this program, China provides WTO prohibited export subsidies to manufacturers which meet export performance criteria. These illegal subsidies have bolstered China’s meteoritic export surge of textiles and apparel into the U.S. market. The chart below demonstrates the phenomenal growth of Chinese textile and apparel exports to the U.S. market since 2001.

China’s massive export growth over this period resulted in billions of dollars in lost sales and tens of thousands of lost jobs in the U.S. and the Western Hemisphere. “It has been NCTO’s long standing position that China’s rise in the global textile and apparel market has been substantially aided by illegal and unfair trading practices. These illegal practices distort the global market place and put the entire U.S. manufacturing base at a considerable disadvantage,” stated NCTO president Augustine Tantillo. “We applaud the Obama Administration for today’s decision to hold our international trading competitors to their WTO obligations,” he continued.

When afforded a level playing field, the U.S. textile and apparel industry can compete with any country in the world. In 2013*, the U.S. textile and apparel industry was the third largest exporter of textile and apparel products in the world, exporting nearly $24 billion in goods. The industry is also a significant contributor to the overall U.S. economy, producing over $70 billion in annual output. Most importantly, the industry remains a major employer in the United States, providing jobs for nearly 500,000 workers from fiber production to finished product in 2013*. Additionally, for every one direct textile or apparel job, there are three additional jobs supported within the U.S. economy.  

NCTO encourages the U.S. to strenuously pursue this matter at the WTO in order to begin the eradication of these illegal trading practices. Doing so will lead to more fair and open competition in the global market.

*This press release contains 2013 data. Full year 2014 data has not yet been released by the USITC.