Through much of the last decade, imports of cotton apparel and textile products have claimed an ever-larger share of total cotton products sold at retail in the United States. During the 1990s, as the value of the U.S. dollar climbed and free-trade policies gained in popularity (and notoriety) around the world, textile trade into and out of the United States blossomed, reaching record levels in 2000 and 2001. In 2002, as the U.S. economy has cooled and the dollar has weakened against major currencies, growth in imports of cotton products has eased. Cotton apparel and textile imports for the first six months of 2002 have grown a meager 1.5% (on a unit basis) from the same period last year. While total cotton product imports from around the world are little changed from last year, Chinese shipments are up 66.4%, propelling China to its standing as fifth-largest foreign supplier of cotton products to the United States. Since total world import volume has barely budged, Chinese shipments have displaced volume from other, traditional suppliers, including Mexico, Honduras, Bangladesh, and Hong Kong. This article evidences the phenomenal growth in cotton product imports from China during an otherwise subdued year for textile trade and suggests two primary reasons to help explain this disparity in growth between Chinese shipments and those from the rest of the world.

On January 1, 2002, under terms of the World Trade Organization Agreement on Textiles and Clothing, signed in 1994, WTO member nations phased out a series of bilateral quotas imposed against one another on certain textile and apparel products. This phase-out is the third of four steps in the elimination of quotas, due to culminate on January1, 2005. The most recent phase-out removed quota restrictions on more than 500 items, 91 of which are cotton-dominant textiles and apparel products. Having just been admitted to the WTO as a full member in December 2001, China has been able to capitalize on the quota removal and utilize its abundant low-cost workforce to increase shipments abroad, particularly to the United States.

Top

The 91 classifications of cotton products on which quotas recently were removed fall into just four categories: gloves and mittens, dressing gowns, other cotton apparel, and cotton textile manufactures not elsewhere specified or included. During the first six months of 2002, total U.S. imports in these four categories were up only 1% from the same period in 2001, to $1.5billion. Yet Chinese shipments climbed an impressive 62.8%, to $467 million, or 31% of total world imports. In these four categories, the volume of imports from China during the first six months of 2002 was larger than the combined volume of imports from the next three countries (India, Pakistan, and Bangladesh). This surge in Chinese imports has displaced volume from several other countries; 10 of the 12 next-largest foreign suppliers in these categories have seen their year-to-date import volumes decline from last year.

Top