Bra Brawl Unlikely to Burst Into Sino-U.S. Trade War

[emad]

SINGAPORE (Reuters) - The imposition of U.S. quotas on Chinese bras and other garments will probably be the first of a raft of pre-election trade skirmishes, but mutual strategic interests make a full-blown trade war unlikely. Trade spats can always get out of hand, and Congressional anger will presumably grow in line with low-cost China's ballooning trade surplus with the United States. Beijing, too, cannot be expected to take U.S. sanctions lying down. But analysts said on Wednesday the sheer scale of two-way economic ties, plus Beijing's importance to Washington on the North Korean nuclear crisis and other geopolitical issues, meant both capitals had a stake in keeping a lid on the textiles row -- just as they seem to be doing over the value of China's currency. "What I imagine is we will see both parties backing away from this," said Lois Dougan Tretiak, China director of the Economist Corporate Network in Beijing.

China, with an increasingly sure grasp of U.S. politics, recognized that the United States was already gripped by election fever and so was seeking ways to minimise trade friction, short of acceding to demands that it revalue the yuan, Tretiak said. These steps included promoting the outflow of yuan to reduce upward pressure on the currency and conducting high-profile purchasing trips to the United States. "What China probably recognizes is that it's important to keep the target narrow -- to not have China itself become a focal point in the debate between the Democrats and the Republicans in 2004," Tretiak added. "So it would be very helpful if they don't make a big to-do about things of this sort."

The Commerce Ministry in Beijing expressed deep regret about the Bush administration's decision to grant so-called safeguard relief on Chinese knit fabric, dressing gowns and bras. It reserved the right to protect its interests through the World Trade Organization, which it joined in late 2001. But in fact, China's WTO accession pact explicitly granted importing states the right to impose safeguards until the end of 2008 because of forecasts that China would more than double its share of the global apparel market to nearly 50 percent.

Sensitive to foreign concerns, China has already taken steps such as reducing export tax rebates to slow export momentum.

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More:
http://reuters.com/newsArticle.jhtml?type=reutersEdge&storyID=3849932

[Racenut20]

1. Definately should ban the import of all bras

[TheLastMohican]

2. Bush should think twice before meddling with China

Anyway, what's all that talk about free trade and WTO was all about? Yju either have open economy and free trade or you close economy and ban all imports but in this case don't go around the world spreading "free market" and "democracy" crap on the wings of cruise missiles.

[ze_dscherman]

3. China threatens reprisal over US import curbs

China on Wednesday reacted angrily against a US decision to impose new import restrictions on several types of textiles and clothing from China and hinted the move could spark retaliation.

Beijing said it "firmly" opposed the decision and warned it was considering an appeal to the World Trade Organisation "to safeguard the interests of Chinese industries." Chinese officials called off a trip to the US to meet soybean producers.

The administration of President George W. Bush, seeking to protect itself against charges that the growing trade deficit with China has cost US manufacturing jobs, announced it would impose new quotas following negotiations with Beijing. It is the first time Washington has invoked a special measure designed to protect US manufacturers from surging Chinese imports.

SNIP

Much of China's gain, however, has been at the expense of other textile and apparel exporting countries in Latin America and Asia.

The US International Mass Retail Association, which represents US clothing sellers, said that the decision "sets a bad precedent and opens the door to more baseless petitions that can only hurt US consumers and the delicate US-Sino relationship"

http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1069131971243&p=1012571727102

[Media_Lies_Daily]

4. "Backing away"?? Not so fast!....

China cancels U.S. trade trips
<http://money.cnn.com/2003/11/19/news/international/trade_china.reut/>