US, China closer to textile trade deal

By Doug Palmer

WASHINGTON (Reuters) – The United States and China are
edging closer to a deal that could curb billions of dollars in
clothing imports from China, but one more round of talks may be
needed, U.S. industry officials said on Wednesday.

“I think the bet right now is they’re seriously going for
it,” said Cass Johnson, president of the National Council of
Textile Organizations. “It’s certainly a better dynamic than
we’ve seen in the past.”

U.S. and Chinese negotiators met for the third day on
Wednesday in pursuit of a deal that would resolve textile trade
frictions that have become a headache for both sides.

The U.S. side issued a brief statement late in the day that
gave no indication of how close the countries were to
agreement.

“The third round of talks with the Chinese aimed at
reaching a broader agreement and textiles will continue this
evening,” lead U.S. textile negotiator David Spooner said.

The talks were originally scheduled for only Monday and
Tuesday. A spokeswoman for the U.S. Trade Representative’s
office would not rule out more meetings on Thursday.

Sources said U.S. Trade Representative Rob Portman met with
the head of the Chinese negotiating team on Tuesday to stress
U.S. interest in a deal governing textile trade between the two
countries for the next few years.

Chinese shipments of shirts, pants, bras, underwear and
other clothing to the United States surged dramatically when a
global quota system ended on January 1, prompting the U.S.
industry to seek relief.

The two sides made little progress toward a deal in two
previous rounds of talks in San Francisco and Beijing, getting
snagged on basic elements such as the length of the pact. The
United States wants a deal that runs through 2008 and China
prefers an agreement that lasts through 2007, like the deal it
struck with the European Union.

Washington already has restricted many clothing imports
from China under a special “safeguard” provision of Beijing’s
entry into the World Trade Organization. That measure allows
countries to hold clothing and textile imports from China at
7.5 percent above the previous year in response to a
“market-disrupting” surge.

U.S. textile groups want an agreement that would restrict
30 or more categories of clothing and textile imports from
China through 2008, when the safeguard provision expires.

“I think they’ve made more progress on product coverage
than anything else,” Johnson said.

But by early Wednesday, the two sides still hadn’t agreed
on the length of the pact or other critical issues, such as the
size of the initial quotas, or annual growth rates, he said.

“I don’t know if they can get enough done here” to wrap up
an agreement, Johnson said, suggesting another round of talks
in Beijing or elsewhere may be needed for that.

China has pushed Washington to promise it would exercise
restraint in using the safeguard provision if Beijing agrees to
voluntary curbs on U.S. clothing exports.

U.S. clothing importers and retailers want any agreement to
allow for progressively higher imports.