August 1, 2005

U.S. says to consult on seeking China textile deal

WASHINGTON (Reuters) - The Bush administration said on
Monday it was delaying a decision on whether to restrict
additional imports of clothing from China so it could consult
with industry and lawmakers about whether to seek a
comprehensive textile trade pact with Beijing.

"Today's decision will allow us time to engage in
substantive discussions with our domestic textile and apparel
industries and members of Congress on whether there is interest
in a broader textile agreement with China," U.S. Commerce
Secretary Carlos Gutierrez said in a statement.

The United States has restricted imports of billions of
dollars worth of clothing from China this year using an
anti-surge "safeguard" mechanism Beijing accepted when it
joined the World Trade Organization in 2001.

The U.S. textile industry has repeatedly called on the Bush
administration to negotiate a comprehensive agreement with
China governing textile trade through the end of 2008. The
United States has raised that idea with China, but never
formally proposed it, administration officials said.

The decision to consult with U.S. stakeholders on whether
to formally seek a deal with China follows a vote last week in
the U.S. House of Representatives on the U.S.-Central American
Free Trade Agreement (CAFTA), where some textile state
lawmakers helped provide the margin of victory.

Rep. Robin Hayes, a North Carolina Republican who switched
his vote to help the White House win a 217-215 CAFTA victory,
said Gutierrez' announcement was "a heck of a step in the right
direction," but urged a quick final decision.


The Bush administration said it was delaying until Aug. 31
a decision on safeguard requests in six categories: men's and
boys' wool trousers, cotton and synthetic dressing gowns and
robes, cotton and synthetic bras, cotton and synthetic
sweaters, knit fabric and certain synthetic filament fabric.

It also announced it had agreed to consider industry
petitions asking for safeguard curbs in five other areas:
cotton, wool and synthetic socks, women's and girls' cotton and
synthetic woven shirts, cotton and synthetic skirts, cotton and
synthetic nightwear and cotton and synthetic swimwear.

WTO rules allow members to impose emergency import curbs on
China clothing in response to a market-disrupting surge through
the end of 2008. The Bush administration has faced pressure to
use that tool to keep China from swamping the U.S. market
following the end of a global quota system on Jan. 1.

The European Union and China reached a broad textile
agreement in June covering 10 categories of clothing and
textiles through 2007. As part of the deal, Brussels agreed to
exercise restraint in imposing safeguard curbs in 2008.

U.S. industry groups have pushed for a comprehensive
agreement covering all the product categories where safeguards
have been filed or approved, as well as others where there
could be a surge in imports from China.

"A fair deal would limit the growth of Chinese imports to
very close to 7.5 percent and should last through the end of
2008," said Auggie Tantillo, executive director of the American
Manufacturers Trade Action Coalition.

It also should allow the United States to seek to extend
the safeguard provision in current world trade talks and to
impose tough penalties on companies that illegally transship
China clothing to get around the emergency curbs, he said.