America's leading retailers filed a lawsuit yesterday to stop the Bush administration from imposing curbs on imports of popular Chinese-made apparel and textiles.
The lawsuit increases the pressure on the administration, which is caught between retailers and consumer advocates seeking access to cheaper goods, and hard-hit domestic manufacturers who fear the loss of market share and jobs.
Frustrated importers say the uncertainty about future access to their Chinese suppliers is forcing them to make costly changes and creating chaos in their supply chains.
"This is very disruptive and our customers aren't happy," said Francie Buckles, director of supply chain management for Leading Lady, an Ohio lingerie supplier whose customers include Target Corp. and Wal-Mart Stores Inc. "We're doing our best, but the government keeps changing the rules midstream."
The importers group filing the lawsuit includes such prominent retailers as Gap Inc., J.C. Penney Co. Inc., Federated Department Stores Inc. and Liz Claiborne Inc.
Domestic textile manufacturers defended their actions, arguing that China's low-cost producers would "cripple" the U.S. industry if left unrestrained.
The case is triggered by the year-end expiration of global textile and apparel quotas. That is expected to result in huge gains for China and India and lower prices for consumers, at the expense of textile and apparel manufacturers in America and elsewhere.
The Commerce Department bowed to textile makers last month, saying it would consider their petitions seeking curbs on $1.3 billion in apparel and textiles based on the "threat" of a surge when the quotas disappear Jan. 1.
A Commerce Department spokesman stood by that decision yesterday, saying that the U.S. government has "ample authority under U.S. law" to accept a petition based on "market disruption or the threat of market disruption."
The committee charged with overseeing U.S. textile agreements accepted its eighth threat-based petition yesterday and one is still pending. A ruling on those petitions is expected early next year.
But in its lawsuit, filed with the U.S. Court of International Trade, the U.S. Association of Importers of Textiles and Apparel said the Bush administration violated its own rules when it accepted those petitions after it had "repeatedly assured the import and retail community that no petitions would be ac- cepted based on some future threat."
The lawsuit seeks to force the Committee for the Implementation of Textile Agreements, or CITA, to give importers greater participation in its decision-making process, which is not open to public scrutiny.
The committee, composed of representatives of the Commerce Department and four other government agencies, was created in 1972 to oversee the U.S. textile trade.
"No other industry faces this type of uncertainty and unfairness in administrative proceedings," said Brenda Jacobs, counsel for the importers.
With the quota deadline nearing, the importers have requested an injunction to stop the government from acting on those petitions.