rich countries was subdued as economies boomed now with weak economic growth and higher unemployment, ob ect of en the potential for protest is much greater. The loss of Merchandise exports, s terms, 1980-100 blue-collar and, increasingly, white-collar jobs is more keenly felt as firms outsource or move their factories h abroad. In poor countries, too, the"China threat"seems 1,500 more acute when export markets are weak And there are more China-related shocks on the way. At 00 the end of 2004, the multifibre arrangement a quota system that has governed, and distorted, the world textile market for decades, is scheduled to expire. Apart from agriculture textiles and clothing al ng the last products where governments rather than markets 1980859095 determine trade patterns. China, with its army of low- Source: WTO paid workers, will be a big winner from the demise of this regime. According to Mr Lardy its share of the american clothing market, for instance could zoom up from 12% in 2002 to 30% once restrictions are lifted America's small but highly protectionist and politically sensitive textile industry will be hurt, and will shout. But it is other developing countries that will feel serious strain Textile production is the first rung on the manufacturing ladder for many poor countries. The quota system has guaranteed such countries access to America and other rich-country markets. Without quotas many will lose out to China. their protests will coincide with rising anti-China sentiment in American manufacturing, creating an atmosphere in which protectionism could flourish America's government has plenty of tools to use. Under the terms of China's entry into the WTO, a number of safeguards"allow countries to slap tariffs on Chinese goods if they are deemed to be causing market disruption". These temporary safeguards can be used for all goods until 2014. For textiles there are additional, even more broadly defined safeguards that apply until 2008 So far the bush administration has shown remarkable restraint in their use, of a handful of safeguard applications filed by American industries two have reached the White House: one by American producers of pedestal actuators(devices used in, eg, electric wheelchairs)and another by American producers of wire coat hangers. Both were turned down One reason for the restraint is a desire to maintain cordial relations with China, not least for geopolitical reasons. Since September 1 1th the Bush team has courted China as an ally in the war against terrorism. Its help is particularly crucial in dealing with North Korea. But as the election looms, domestic political considerations will play an increasing part. The Bush team has jettisoned its free-trade instincts in the pursuit of votes before, and may well do so again in 2004. Many trade-watchers in Washington fear the introduction of a mass of safeguards and anti-dumping tariffs, and a rapidly souring economic relationship with China, especially if there is no movement on th lor is China the only area where trade spats are likely to intensify. The transatlantic trade relationship, too, will see more disputes particularly if the euro rises. An appreciating euro will put European industry on the defensive though that defensiveness is unlikely to translate into a flurry of anti-dumping and safeguard actions. Europe's trading relations are handled at the level of the European Union, not individual countries, which makes Europe's trade policy lessrich countries was subdued as economies boomed. Now, with weak economic growth and higher unemployment, the potential for protest is much greater. The loss of blue-collar and, increasingly, white-collar jobs is more keenly felt as firms outsource or move their factories abroad. In poor countries, too, the “China threat” seems more acute when export markets are weak. And there are more China-related shocks on the way. At the end of 2004, the Multifibre Arrangement, a quota system that has governed, and distorted, the world textile market for decades, is scheduled to expire. Apart from agriculture, textiles and clothing are among the last products where governments rather than markets determine trade patterns. China, with its army of low￾paid workers, will be a big winner from the demise of this regime. According to Mr Lardy, its share of the American clothing market, for instance, could zoom up from 12% in 2002 to 30% once restrictions are lifted. America's small but highly protectionist and politically sensitive textile industry will be hurt, and will shout. But it is other developing countries that will feel serious strain. Textile production is the first rung on the manufacturing ladder for many poor countries. The quota system has guaranteed such countries access to America and other rich-country markets. Without quotas many will lose out to China. Their protests will coincide with rising anti-China sentiment in American manufacturing, creating an atmosphere in which protectionism could flourish. America's government has plenty of tools to use. Under the terms of China's entry into the WTO, a number of “safeguards” allow countries to slap tariffs on Chinese goods if they are deemed to be causing “market disruption”. These temporary safeguards can be used for all goods until 2014. For textiles there are additional, even more broadly defined safeguards that apply until 2008. So far the Bush administration has shown remarkable restraint in their use. Of a handful of safeguard applications filed by American industries, two have reached the White House: one by American producers of pedestal actuators (devices used in, eg, electric wheelchairs) and another by American producers of wire coat hangers. Both were turned down. One reason for the restraint is a desire to maintain cordial relations with China, not least for geopolitical reasons. Since September 11th the Bush team has courted China as an ally in the war against terrorism. Its help is particularly crucial in dealing with North Korea. But as the election looms, domestic political considerations will play an increasing part. The Bush team has jettisoned its free-trade instincts in the pursuit of votes before, and may well do so again in 2004. Many trade-watchers in Washington fear the introduction of a mass of safeguards and anti-dumping tariffs, and a rapidly souring economic relationship with China, especially if there is no movement on the yuan. Nor is China the only area where trade spats are likely to intensify. The transatlantic trade relationship, too, will see more disputes, particularly if the euro rises. An appreciating euro will put European industry on the defensive, though that defensiveness is unlikely to translate into a flurry of anti-dumping and safeguard actions. Europe's trading relations are handled at the level of the European Union, not individual countries, which makes Europe's trade policy less