Textile associations from around globe unite against a common foe: China.

Textile and apparel industry trade associations from around the world are galvanizing behind a proposal to request that the World Trade Organization postpone the planned January 1, 2005, phase-out of textile and apparel quotas from developing nations.

Fear is growing throughout the

world that when the quotas are removed, China will overwhelm markets with high-quality cheap textiles and apparels and put as many as 30 million employees out of work in places like Bangladesh, Philippines, Zambia, Laos, Peru, Mexico, Switzerland, Sri Lanka, the United States and dozens of other countries.

Ninety-one textile and apparel trade associations from 49 countries have now endorsed the "Istanbul Declaration," which calls on the WTO to hold an emergency meeting to address the threat posed by China's potential global export surge. The group, which includes five U.S. trade associations, met in Brussels, Belgium, in mid-June to coordinate their efforts and heighten awareness of the "certain catastrophic fallout" that will come when quotas are removed. Supporters of the effort note that in the past two years, U.S. importers have increased orders from China by 830 percent in 29 apparel categories in which China was removed from quotas.

The latest evidence of China's surging exports came when the U.S. hosiery industry filed a China "safeguard" petition with the Commerce Department claiming that surging imports are decimating the industry. Imports of Chinese socks have increased from one million dozen pair in 2001 to 22 million dozen pair in 2003, an increase of 2,153 percent, says the petition. During that time, U.S. production fell from 207 million dozen pair to 166 million dozen pair. The U.S. market share for U.S. producers fell from 64 percent to 44 percent. U.S. companies eliminated 17 percent of their employees, or 4,000 workers, and closed 30 factories. Meanwhile, the average cost of a dozen pair of socks from China fell from $9.00 to $4.15. The retail price of socks did not decline, which means U.S. importers and retailers are swimming in profits, say petitioners. "The nature of the U.S. retail distribution system, dominated by big-box retailers who employ global reverse auction bidding, simplifies import penetration," says the Hosiery Association. "The top three U.S. retailers control 52 percent of the U.S. retail sock market, while no such widespread, easily accessible retail distribution exists in China for U.S. sock exports."

The sock industry "is the same classic story that is going to impact many more industries," says one textile industry executive.

Developing countries were intended to benefit from the elimination of quotas, which was agreed upon in the 1994 Uruguay round of world trade negotiations. These nations are now among those most opposed to the phase out.

"There are so many jobs at stake in so many countries it is an issue that the WTO can't ignore," says Lloyd Wood, a spokesman with the American Manufacturing Trade Action Coalition in Washington. Adds Suleyman Orakcioglu, chairman of the ITKIB Association in Turkey: "The expiration of quotas represents a crisis of unprecedented worldwide proportions."

China was not part of the Uruguay round of negotiations, but was allowed to be part of quota relief when it was accepted into the WTO.

The trade associations involved in the Istanbul Declaration now need a government to petition the WTO to hold an emergency meeting on the issue. That is expected to occur within a month. The United States government will not submit that petition, but its reaction to the filing will be closely watched, particularly in a tough election year in which the issues of job loss in the manufacturing sector and China's trade practices have become important in industrial swing states and the Carolinas. President Bush's office of the United States Trade Representative can endorse the petition, oppose it outright or "ignore" it. If the USTR does nothing, it will allow the process to move forward.

Those involved say there is a lot at stake beyond the possible loss of tens of thousands of jobs in the United States. If a similar magnitude of jobs are lost in Mexico and throughout Central and South America due to a surge of imports from China, the United States could get swamped by thousands of additional illegal immigrants. If countries like Jordan, Pakistan, Egypt and other Muslim nations on the front lines on the war on terror lose significant market share to China, the loss of jobs could further exacerbate national security concerns. "The story is getting hotter by the day," says Wood.

The creation of a vast international network of trade associations working together is unique and could set the stage for how other industries will deal with global trade challenges. "We have people who have been at each other's throats for 30 years who are now coming together" to work on a common challenge, Wood notes. "It's a new model for approaching trade issues."