Global Policy Forum

By Elizabeth Becker

The Bush administration, reacting to a flood of Chinese clothing imports since January, announced on Friday that it would impose new quotas on cotton shirts, trousers and underwear from that country. Carlos M. Gutierrez, the commerce secretary, said late Friday that the administration was invoking its right to impose quotas, or safeguards, because the imports were disrupting the American market. Mr. Gutierrez said in a statement that his action "demonstrates this administration's commitment to leveling the playing field for U.S. industry by enforcing our trade agreements."

Retailers had gone to court to block new quotas, arguing that they would raise the prices of clothing for American consumers. Since Jan. 1, the prices of imported Chinese apparel have dropped as the volume has increased. The quotas will take effect when the administration notifies China of its decision and discussions are held about the size of the limits. China has already warned the United States and Europe that it will resist any attempt to limit its textile and apparel exports.

Pressure was building on the administration to slow Chinese imports even before the global textile quota system ended on Jan. 1. Since then China's booming textile and apparel industry, unhampered by quotas, has grown significantly in some of the few areas where the American industry still produces mass-market clothing. Since Jan. 1, Chinese exports of cotton trousers to the United States have grown by 1,500 percent and by 1,350 percent for cotton knit shirts, according to trade figures. At the same time, the United States textile industry has lost 16,000 jobs and 18 factories have closed, according to government reports.

The American textile industry petitioned the administration to slow the surge of the imports, asking Washington to invoke clauses in the agreement it signed with Beijing when China joined the World Trade Organization. With the action on Friday, the United States will limit any growth in Chinese imports of cotton shirts, trousers and underwear to 7.5 percent a year. "The fast action to reimpose quotas by the Bush administration today has saved thousands of textile jobs in this country and we are extremely grateful," said Cass Johnson, president of the National Council of Textile Organizations, a trade association.

The announcement came one day after President Bush met with the leaders of five Central American countries and the Dominican Republic to promote a trade pact with these nations that has stalled in Congress. The textile industry has opposed the pact, the Central American Free Trade Agreement, as another threat to the American industry, but Mr. Johnson's organization broke with the other trade associations and endorsed the pact, known as Cafta, this week.

Kimberly Elliott, a trade specialist at the Institute for International Economics, said that the administration undoubtedly reached a quick decision in favor of the American textile industry in part to win more support for Cafta. "The administration has been working the link between the safeguards and Cafta for some time, but I think they would have done this eventually even if Cafta didn't exist," Ms. Elliott said. "If the administration is going to take a hit from China for this," she said, "it might as well get some benefit for Cafta."

The European Union has also begun investigations into the huge increases in imports of inexpensive Chinese textiles and apparel with an eye toward imposing quotas as well. Pascal Lamy, the former European trade commissioner who was picked on Friday to become the new head of the World Trade Organization, warned last week against imposing quotas. Mr. Lamy said that the global trade body had been easing out the quota system over the last decade and that all countries had been given ample opportunity to prepare for the changes. "It is not the law of the jungle, and the W.T.O. rules were clearly set," he said. "Why are some politicians now not recognizing that fact?'

But the lawmakers in Congress say that it is China that fails to follow the rules. Several bills are being debated that would impose penalties on China for currency manipulation, violating intellectual property rights and following other forbidden practices like giving producers overly lenient loans and export tax rebates.