Japan's towel makers have made a formal request to the government to curb rising textile exports from China and other developing countries. Emergency import restrictions, known as safeguards, are internationally recognized as an exception to the free-trade rules of the World Trade Organization. So far, Japan, a declared free trader, has not taken this measure of last resort, although the government is now weighing whether or not to invoke it against imports of farm products such as vegetables.
Safeguards can be imposed temporarily when sharp increases in imports of a particular type of product have caused, or threaten to cause, serious damage to the domestic producers involved. Towel imports, about 80 percent of them from China, have increased 50 percent over the past four years. As a result, domestic production has dropped 25 percent. Imported towels now account for nearly two-thirds of the domestic demand.
The primary reason for this is that imported products are cheap. In China, the cost of production is said to be just a tenth of that in Japan. Domestic products cannot match the prices of Chinese brands. That is why the Japan Towel Industrial Association has filed a petition for safeguards. Given the plight of domestic makers, particularly small ones, the move is understandable.