Court Temporarily Enjoins CITA from Taking Further Action, Etc. on Threat-Based China Safeguard Petitions
On December 30, 2004, the Court of International Trade (CIT) issued a preliminary injunction in U.S. Association of Importers of Textiles and Apparel (USA-ITA) v. Committee for the Implementation of Textile Agreements (CITA) et al. which enjoins CITA, during the pendency of this action, from accepting, considering, or taking any further action on requests filed under CITA's textile safeguard procedures that are based on the threat of market disruption upon the elimination of quotas or safeguards on textile or apparel products from China.
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(According to a Textile Development Memo issued by USA-ITA, in light of this development, it is unlikely that any safeguard decisions will be issued by CITA in February 2005. In addition, trade sources indicate that pending threat-based China safeguard petitions for the following categories of textiles and apparel are affected by this preliminary injunction:
| 222 | 301 | 338/339 | 340/640 |
| 347/348 | 349/649 | 350/650 | 352/652 |
| 447 | 620 | 638/639 | 647/648) |
CIT Finds Mere Consideration of Threat-Based Petitions Harms Importers
The CIT found, among other things, that CITA's mere acceptance of threat-based China safeguard petitions irreparably harms USA-ITA's members since such acceptance makes it necessary for them to detrimentally alter their 2005 business plans.
Furthermore, when considering the balance of hardships (i.e. which party would suffer the greatest adverse effects as a result of the grant or denial of the preliminary injunction), the CIT again found in favor of USA-ITA's members as they would suffer irreparable injury in the absence of an injunction.
USA-ITA's Complaint Questions Validity of CITA's Delegated Authority
According to the CIT, the scope of USA-ITA's complaint clearly exceeds that of the requested preliminary injunction, as it has raised an important question as to whether CITA's delegated authority to administer textile agreements includes the authority to issue regulations pursuant to China's World Trade Organization (WTO) Accession Agreement.
The CIT explains that whether a WTO accession agreement is a "textile agreement" within the meaning of 7 USC 1854 is a question of first impression. The CIT further states that if the plaintiff is fully successful on the merits of the case, CITA's China textile safeguard procedures would be invalidated in their entirety.
(See ITT's Online Archives or 12/08/04 news, 04120899 1, for BP summary of USA-ITA's announcement that the CIT would hold a December 20, 2004 hearing on its motion for a preliminary injunction. See ITT's Online Archives or 12/20/04 news, 04122005 for BP summary of deadlines and due dates for certain pending China safeguard petitions.)
CIT Slip Op. 04-162 (dated 12/30/04) available at http://www.cit.uscourts.gov/slip_op/Slip_op04/Slip-Op%20number%2004-162.pdf
USA-ITA TDM (dated 12/31/04), www.usaita.com )
BP Note
The only China safeguard quota currently in effect is for certain socks in cat 332/432/632pt., for exports during the October 29, 2004 through October 28, 2005 period.