Textile industry rent-seekers

By Tim Worstall | 5 May 2005

Following hard on the heels of the EU's announcement that it was going to investigate Chinese textile imports, the US does the same. Even protectionism is subject to globalization it seems.

The US government has bowed to pressure from the textile industry to investigate the sharp increase in imports from China. It has promised a swift, fair inquiry into seven types of textile items.

Looking at the Bureau of Census figures for textile imports from China, it does seem that there has been a surge in certain classes. Slightly more exhaustive digging (the next page) into the figures shows that reality may not be quite as it is painted. Textile imports as a whole have gone up on a year by year basis by 14%. Imports from China have gone up by more than 60%, those from Mexico, Hong Kong and Macau have fallen by 4.5%, 14% and 13 % respectively.

The question of whether there should be some protection for domestic firms, so that they can adjust, may depend on the idea that there is some wave of imports swamping them. What appears to be happening is that there is indeed a rise in imports, but that the vast majority of the rise in Chinese sourced imports is a function of a fall in imports from other countries. This might be something for producers in Hong Kong and Macau to complain about but it is difficult to see that it justifies the re-imposition of quotas on imports from China as far as the American market is concerned.

Bowing to pressure from the textile industry indeed.