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Last Updated: Saturday, 4 June 2005, 11:02 GMT 12:02 UK
US and China in textile row talks
Bo Xilai (left) and  Carlos Gutierrez
Bo Xilai (left) and Carlos Gutierrez have a lengthy agenda
US trade envoys have met Chinese counterparts in Beijing to try to solve a damaging row over textiles.

The row stems from a surge in Chinese textile exports to the US since a global quota regime ended in January.

The US has slapped import curbs on a number of goods, prompting China to scrap more than 80 export tariffs.

The US says the yuan is pegged too low against the dollar and also wants to press Beijing for more action to curb rampant piracy of goods.

Until the start of this year, the global textile trade was governed by the 30-year-old Multi-Fibre Agreement, which set import quotas for each country.

China's exports have surged under the new trading system, while US and EU producers say they are unable to compete.

The conflict has been exacerbated by long-standing US accusations that China is deliberately keeping its currency undervalued in an attempt to boost exports.


The BBC's Daniel Griffiths in Beijing says both sides realise a costly trade war will be extremely damaging.

He says the talks are a good start but with so much at stake there is still a long way to go.

Only on the basis of mutual benefit can we make our trade and economic relationship bigger
Bo Xilai,
Chinese trade minister

US Commerce Secretary Carlos Gutierrez met Chinese Trade Minister Bo Xilai on Saturday.

Mr Bo was positive after the meeting, saying: "Sino-US trade witnessed such great progress in the past 26 or 27 years and we two countries should have the capability to properly deal with the textile trade issue and other questions."

Mr Gutierrez was later joined by US Trade Representative Robert Portman for talks with Chinese Vice Premier Wu Yi, who oversees trade.

Mr Gutierrez said he had had a "good meeting" with Mr Bo but had earlier warned Beijing of Washington's deep concern over the issue.

"Respectfully, I don't believe that there is full appreciation in China for the level of political pressure that we face with respect to our relationship."

Mr Bo had in turn criticised the US import curbs, saying they violated World Trade Organization rules. "It is a move of trade protectionism," he said.

Mr Gutierrez stressed that Beijing also had to do more to stamp out piracy of intellectual property.

US industry groups say Chinese piracy of music, movie and software goods costs them up to $3.8bn a year.

The US also wants China to alter the yuan's valuation. It says the 8.28 to the dollar peg undervalues the Chinese currency, giving Chinese exporters an unfair advantage.

Mr Bo says the currency and textile issues should not be linked.

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