US Appellate Court reverses textiles safeguard injunction

29 Jun '05

4 min read

The US Court of Appeals for the Federal Circuit reversed the injunction issued by the US Court of International Trade (CIT) that prohibited the US government from considering petitions to invoke safeguards on textile and apparel imports from China on the basis of threat.

"Today's ruling is a smashing victory for the US government and vindicates the decision by the US textile industry to file safeguard petitions on the basis of threat," said American Manufacturing Trade Action Coalition (AMTAC) Executive Director Auggie Tantillo.

"We believe the ruling will make it virtually impossible for the US Association of Importers of Textile and Apparel (USA-ITA) to win their case in the lower court, locking in both the seven safeguards approved by the US government in 2005 and the ability of the US textile industry to file additional threat-based cases in the future," continued Tantillo.

Last year, USA-ITA filed suit against the US government to prevent it from considering threat-based safeguard cases under Paragraph 242 of the Working Party Report to China's Accession to the WTO. USA-ITA argued that because the procedures issued by the Committee for the Implementation of Textile Agreements (CITA) did not cover threat-based actions, the US government had no authority to consider such cases.

The appellate court resoundingly rejected USA-ITA's argument and wrote, "CITA's procedures and paragraph 242 both follow the disputed language with a description of the stated purpose of the paragraph 242 safeguard, which is 'easing or avoiding such market disruption.' The word 'avoiding shows that current market disruption is not a prerequisite for action under either the procedures or paragraph 242 because 'such market disruption' cannot be 'avoid[ed]' if it has already occurred....The express purpose of [CITA's] procedures is to implement the paragraph 242 safeguard and the language 'due to market disruption, threatening to impede the orderly development of trade' in the procedures is a direct quotation from paragraph 242. Thus, a further reason for rejecting the USA-ITA's interpretation of the allegedly 'plain language' of the procedures is that it would require us to interpret identical language differently when it is used in paragraph 242 from when it is used in the procedures, despite the fact that the express purpose of the procedures is to aid in implementing paragraph 242." See US Association of Importers of Textiles and Apparel v. United States, pages 13 and 14.

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