China-US Textile War? Explain!

US is the major buyer of the Chinese textile. Even before China’s entry into the WTO, US and China have their bilateral trade agreements in force for some years. The question arose on the quantitative restrictions put by the USA on imports of such textile, especially cotton goods from China from May, 2005. China claims that these restrictions are against the quota-system provision of the WTO’s multi lateral trade agreement. Interests of domestic industrialists will be protected in accordance with the bilateral agreements that exist between the two, it was claimed by the bush administration.

The USA committee on implementation of Textile Agreement has taken this decision and the Government does not seem to willing to remove these protectionist measures. China contends that, through the WTO, these restrictions should be removed and interest of China should not be restricted. By declaring that such measures by the US may affect the Sino-American trade relations if the arbitrariness is not removed China has expressed its dissatisfaction. This textile war between two major market players of the world has posed a question that how much in WTO effective and what is its utility.

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