A big problem for both Canada and the US is the growing threat of China with respect to the surge in textile and clothing imports since the beginning of this year with the end of the ATC. An observer has even suggested that this could be another emerging area of dispute between Canada and the US. With the elimination of import quotas on textiles and apparel between the US and Canada, China is exp'ected to be the main beneficiary of this trade liberalisation. US textile groups have been urging the government to impose a special textile safeguard that will limit imports to 7.5 above the recent trade for up to one year. This may affect Canada should the US safeguard actions cause a diversion into the Canadian market. Canada may launch safeguards as well to limit imports of ap- parel and textiles.
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