HOW ARE THESE SAFEGUARDS SIGNIFICANT?

Self-initiation -- On April 30 CITA self-initiated the cases on these three products. So far these are the only self-initiated cases. Self-initiation is significant as it demonstrates that our government is willing to commence an action which may provide relief to the U.S. textile industry rather than merely reacting to our clamor for relief. Self-initiated cases can be brought to conclusion and safeguards imposed more quickly that is the case with industry-requested safeguards. Since September 2004 NTA has been asking our government to self-initiate cases. We are pleased that finally, after more than six months delay, these three safeguard cases will result in some limited restraint on China.

Prompt action -- The mandatory 30-day comment period for these self-initiated cases ended on Monday, May 9 and CITA made it's determination within the week. The procedures allow CITA to take up to 60 days to make a determination and in the cases of the four safeguards previously imposed, CITA took the entire 60 days. We also note that CITA has stated the intention to seek consultations with China on these products by the end of May, in other words, within a couple of weeks. This is important as the May 13 announcement merely states that CITA intends to impose safeguards, but the safeguards won't actually be imposed until CITA requests consultation with China. In the case of the safeguards we obtained with regard to brassieres, dressing gowns, and knit fabric, CITA allowed over five weeks to elapse between the determination to impose safeguards and the actual imposition of safeguards. In addition to these three self-initiated textile safeguard cases, there are currently four cases pending before CITA, for which the public comment period has closed. According to the May 13 press release, "CITA is working vigorously to complete its analysis of the facts at issue in those cases and will issue its determinations on the merits of those cases as expeditiously as possible." NTA is pleased that for the first time the Administration has recognized the need for swift action to impose safeguards before irreparable damage is done.

Threat-based -- These latest safeguards are also significant as these are first ever imposed by the U.S. based on threat to the domestic U.S. industry as well as actual disruption. In the May 13 press release CITA stated that this decision to invoke textile safeguards is "based on market disruption and threat of market disruption due to the magnitude of increases in textile imports from China and China's significant capacity to increase production and exports to the United States in these product categories." It has been vitally important that we establish that safeguards can, and will, be used to help a struggling American industry and not limited to application only after the damage is done.

WHAT WILL SAFEGUARDS DO?

When CITA requests consultations with China an automatic safeguard takes effect pending the outcome of the consultations. The limit will be set at 7.5 percent above the quantity imported from China in the first twelve months of the most recent 14 months. The U.S. and China may agree to some other (higher) limit. But if there is no agreement the 7.5 percent growth limit will continue in effect until the expiration of the safeguard.

SO HOW MUCH CAN THEY IMPORT?

The safeguard is calculated based on imports from China in the first 12 full months of the most recent 14 full months for which import data is available. The quota will be 107.5 percent of that 12-month total prorated by the number of days the safeguard will be in effect.

Examples:

If the base 12-month period is year-ending-February and the date of imposition of the safeguards is May 23 the limits in effect for the period May 23 through December 31 will be:

-30-

NTA, formed in 1854, is the oldest industrial trade association in America. Its members weave and knit fabric in the U.S.; manufacture yarns in the U.S. for the formation of fabrics; and dye, print, and otherwise finish fabrics in the U.S. For more information about NTA, see our website www.nationaltextile.org.