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U.S. BUSINESS NEWS

Textile Makers Lose Bid to Cap Chinese Imports

By GREG HITT

Staff Reporter of THE WALL STREET JOURNAL

December 31, 2004; Page A2

WASHINGTON -- On the eve of a broad change in global textile-trade rules, a federal district court ordered the Bush administration to suspend consideration of several petitions that would have imposed new limits on imports of Chinese-made apparel.

The temporary injunction was issued late yesterday by Judge Richard Goldberg of the U.S. Court of International Trade. In the opinion, Judge Goldberg raised doubts about the Bush administration's authority to consider import limits based on the threat of market disruption. The action effectively bars the administration from considering several petitions, filed on behalf of U.S. textile manufacturers, seeking protection against Chinese competition.

Beginning Jan. 1, all limits, or so-called quotas, on the import of Chinese textile products will expire. The U.S. Association of Importers of Textiles and Apparel, a trade group representing dozens of big U.S. retailers, including J.C. Penney Co. and Liz Claiborne Inc., filed a lawsuit four weeks ago seeking to block the administration from acting on the textile petitions.

Brenda Jacobs, a lawyer from the association, said the ruling is very significant because the judge is clearly signaling our concerns are valid, that there's something broken about this process.

Jim Schollaert, a top lobbyist for the American Manufacturing Trade Action Coalition, a group representing U.S. textile makers, condemned the ruling, saying, The Court in this case has turned a blind eye to the tremendous damage to domestic manufacturers and their communities. He added that China had the capacity to flood the U.S. market and overwhelm U.S. manufacturers.

The court action clears the way for consideration of the broader lawsuit filed by the retailers and importers.

Write to Greg Hitt at greg.hitt@wsj.com