The government can move ahead to decide whether to re-impose quotas on various types of imported clothing from China (search) based on cases the U.S. industry filed last year, a federal appeals court ruled Wednesday.

The U.S. Court of Appeals in the District of Columbia (search) lifted an injunction that had prevented the government from proceeding.

The original injunction was imposed last December by the U.S. Court of International Trade (search) in New York, which held that U.S. retailers and importers had valid arguments in contending that the government could not act on a threat of harm to the domestic industry but must wait until an actual surge in imports occurred.

The domestic textile industry hailed Wednesday's decision as a breakthrough in their efforts to halt job losses and plant closings from a flood of Chinese imports that started pouring in when global textile quotas were lifted on Jan. 1.

Auggie Tantillo, executive director of the American Manufacturing Trade Action Coalition (search), said the ruling vindicated the industry's contention that it had the right to file the cases based on the threat of harm to the domestic industry.

In the four months the government has been prevented from taking action, he said, 17,000 U.S. textile and apparel jobs have been lost and the industry has lost millions of dollars in sales to Chinese competition.

U.S. retailers and importers who have been fighting against the re-imposition of quotas said that while the ruling was a setback, they still hope to win when the case's merits are argued before the appeals court next week.

"This injunction has been in place for four months and we have gotten the U.S. government's attention that the importer and retailer community will stand up and speak out if they feel their interests are being disregarded for political goals," said Brenda Jacobs, a Washington attorney representing the United States Association of Importers of Textiles and Apparel (search).

It was not immediately clear whether the government would move ahead to make decisions on the original petitions or proceed with cases that have been filed this year based on the actual import surges that have occurred.

Textile issues are handled for the administration by the Committee for the Implementation of Textile Agreements (search), an interagency panel led by the Commerce Department.

In a statement, the group said, "CITA is reviewing the court's decision and its impact on the timeline for the 12 threat petitions" filed last year.

Cass Johnson, president of the National Council of Textile Organizations (search), said the industry hoped the government would proceed with the original cases because it would cut the time needed before quotas could be re-imposed, especially on a group of industry cases filed April 6.

The administration on April 4 began its own cases in three product categories and two days later the industry filed cases covering seven more categories.

The cases filed this year were not covered by the original injunction.