Guy de Jonquières argues that U.S. (and European Union) barriers to Chinese textiles imports are not a good idea ("Facing facts on China trade", Financial Times, April 18, registration required)
Chinese production may be up quite a bit over 2004, however, "...most of China's gains have been at the expense of other exporters and often reflect its producers' decisions to repatriate offshore production in anticipation of the removal of quotas."
It's not clear the U.S. industry has been harmed: "The steady decline in its employment and output has not quickened: the rate of job losses in the first quarter was actually lower than the average since the mid-1990s, while product prices firmed slightly."
Years and years of trade barriers have allowed the U.S. industry to remain competitive. It is not likely that a few more years of trade barriers (allowed under WTO agreements) would allow it to do so. "More likely, the beneficiaries would be other low-cost exporters, such as India."
Suppose the textile industry gets its trade barriers:
"...China would win twice. First, it would get to keep all the "rents" generated by voluntary restrictions. Second, limiting export volumes would induce its manufacturers to maximise profits by moving into the kinds of more sophisticated products in which western companies currently have a competitive advantage.
That is exactly what happened in Japan, after the US strong-armed it into restraining voluntarily exports of cars and other products in the 1980s. Not only did the measures fail to save Detroit; they increased Toyota's incentive to attack the luxury end of the market by launching the Lexus..."
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