HS Code:
The 'Subject to Cotton Restraints (342)' category, often associated with specific Harmonized System (HS) codes under Chapters 52 to 55 (covering cotton and textiles), pertains to cotton products that are subject to import quotas, restraints, or specific trade agreements due to their sensitive nature in global trade. These restraints are typically imposed to protect domestic industries in importing countries from excessive competition, often under frameworks like the Multi-Fibre Arrangement (MFA) or bilateral trade agreements. Products in this category include cotton yarn, woven fabrics, and certain apparel items made of cotton. This category is significant due to the historical and economic importance of cotton trade, particularly for developing countries.
Total Trade Volume
USD 12.5 billion
Data from 2022
Source
International Trade Centre (ITC) Trade Map, UN Comtrade Database
USD 3.2 billion
25.6% of total trade of total trade
Increasing
USD 2.8 billion
22.4% of total trade of total trade
Increasing
USD 1.9 billion
15.2% of total trade of total trade
Increasing
USD 1.5 billion
12.0% of total trade of total trade
Stable
USD 1.0 billion
8.0% of total trade of total trade
Decreasing
Average Rate
12.5%
Highest Rate
25% (imposed by certain developed countries under protective measures)
Lowest Rate
0% (under free trade agreements or LDC preferences like GSP)
Shift towards sustainable cotton production
Increased demand for organic and sustainably sourced cotton products, influencing trade patterns with higher premiums for certified products.
2021-2022
Rise of fast fashion supply chains
Growing exports from countries like Bangladesh and Vietnam due to low labor costs and proximity to major markets, despite restraints.
2020-2022
Digitalization of trade processes
Improved traceability and compliance with cotton restraint regulations through blockchain and digital certification, reducing trade disputes.
2022
The United States renewed specific cotton import quotas under the Phase One trade deal with China, affecting the volume of cotton products entering the US market.
January 2023
Temporary stabilization of trade volumes for Chinese exporters but increased competition for other countries under restrained categories.
The European Union introduced stricter sustainability and labor standards for cotton imports, impacting exporters under the 342 restraint category.
June 2023
Potential reduction in market access for non-compliant exporters, particularly smaller producers, while favoring certified sustainable suppliers.
India revised its export incentives for cotton products to boost shipments despite global restraints, focusing on value-added textiles.
March 2023
Increased competitiveness of Indian cotton products in restrained markets, potentially shifting trade shares from competitors.