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Last Updated: Thursday, 18 August 2005, 09:16 GMT 10:16 UK
US-China on verge of textile deal
Chinese textile worker
The US is worried about Chinese textiles flooding the country
US negotiators say they are close to a textile trade deal with China, despite two days of talks ending without agreement between the countries.

Officials were optimistic that a deal could be reached after one more session of talks due in China later this month.

Chinese clothing exports to the US are limited under special World Trade Organization (WTO) rules amid claims they are damaging the US textile trade.

However, retailers warn tough new limits may push up clothing costs.

Blocked imports

Since a three-decades-old global quota system expired on 1 January, US figures show Chinese textile imports to North America have surged 54% year-on-year.

In response, the Bush administration has blocked billions of dollars' worth of shirts, trousers and other clothing under a special textile "safeguard" provision that China accepted when it joined the World Trade Organization (WTO) in 2001.

We hope we can resolve this in one more meeting, but we will take however long it takes
David Spooner, chief US textile trade negotiator

David Spooner, the chief US textile trade negotiator, said both sides were keen to reach an agreement following the end of the talks in San Francisco on Wednesday.

"We hope we can resolve this in one more meeting, but we will take however long it takes," he said. "Both sides say they'd rather take a little more time to reach a good deal rather than a hasty deal."

Mr Spooner said there had been no agreement as yet on the length of any deal, or the possible limits on any category of imports.

'Climate of uncertainty'

The two days of talks began as part of consultations required under WTO rules if a nation has imposed safeguard measures.

Mr Spooner said the two sides were trying to ease the "climate of uncertainty" being felt by US manufacturers, importers and retailers, and by Chinese exporters.

The US tabled a proposal limiting Chinese clothing imports into the US for the next three years, until the end of 2008, the maximum allowed under the WTO safeguard provisions - and not coincidentally, the date of the next US presidential election.

Chinese woman arranges a clothing display
US textile workers want to see a long-term deal on Chinese imports

The Bush administration is also expected to make a decision by the end of this month about requests for additional restrictions on goods not already covered by the limits.

At present the US has imposed quotas on a number of Chinese clothing categories that limit growth in imports to 7.5% a year, a rate US textile manufactures would like to see enshrined in the final deal.

'We need stability'

"We need stability and predictability so we know we are not going to get 1,000% surges while waiting for safeguards," said Missy Branson of the US National Council of Textile Organization.

"At best we could hope for a general framework that comes out of these talks."

The European Union (EU) has suffered similar problems, but avoided an all-out trade war after Brussels and Beijing agreed limits on Chinese exports in June.

The EU deal, which is only until 2007, limited imports to between 8.5% and 12.5% annually.

However, China breached those quotas a month later, prompting Brussels to block imports of Chinese-made sweaters.

US 'hoping for China trade deal'
11 Aug 05 |  Business

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