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Last Updated: Friday, 2 September 2005, 05:28 GMT 06:28 UK
US places curbs on Chinese bras
Chinese clothing market
Chinese clothes exports to the US have surged this year
The US has introduced further quotas on Chinese-made clothing exports, intensifying an already fierce trade dispute between the two countries.

Washington announced new limits on imports of Chinese bras and synthetic fabric soon after negotiations aimed at solving the dispute broke down.

The two sides have agreed to hold further talks but China has admitted that fundamental differences remain.

US textile producers claim that cheap Chinese imports are threatening jobs.

Politically sensitive

China is embroiled in a separate wrangle with the European Union, which has led to tonnes of clothing being blocked by customs authorities.

Millions of goods, including trousers and bras, are currently stranded at European ports after China breached annual quota levels.

Both sides showed a certain flexibility but due to differences on fundamental issues the talks did not reach agreement
Chinese commerce ministry

The Bush administration announced further curbs on Chinese clothing exports on Thursday, adding to limits on trade in knitted shirts, cotton trousers and underwear already in force.

The decision is politically sensitive because it comes ahead of a visit by Chinese president Hu Jintao to the US next Wednesday.

The US textile industry has demanded action, complaining that a surge in Chinese exports since the abolition of global textile quotas at the start of the year has resulted in the closure of nearly 20 factories.

Chinese vice commerce minister Gao Hucheng (left) and US trade official David Spooner
The new limits came after the two sides failed to reach agreement

The terms of China's accession to the World Trade Organization allow the US to place limits, known as safeguards, on the growth of Chinese clothing imports.

"The US textile industry will file as many safeguard cases as it takes to halt these job-killing trade practices," Auggie Tantillo, executive director of the American Manufacturing Trade Action Committee, said after the latest limits were announced.

Business uncertainty

Negotiations aimed at reaching a comprehensive agreement on textile trade between China and the US ended on Thursday without agreement.

The Chinese commerce ministry said that the two sides had agreed to meet again but had not set a date for future talks.

"Both sides showed a certain flexibility but due to differences on fundamental issues the talks did not reach agreement," it said in a statement released on Thursday.

Chinese manufacturers have warned that the dispute is causing significant disruption and if further restrictions are imposed, they might start looking to other markets.

"The trade disputes bring much uncertainty to Chinese businesses," said Huang Jin, deputy general manager of the Tianjin Textile Group Import and Export, a business located in the northern city of Tianjin.




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See the clothing stacking up in warehouses



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