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U.S., China Textile Talks Fail

U.S., China Textile Talks Fail
By STEPHANIE HOO
The Associated Press
Wednesday, August 31, 2005; 5:45 PM

BEIJING -- U.S.-China talks Wednesday failed to settle a dispute over American efforts to rein in imports of low-cost Chinese textiles, amid signs that China's position was strengthened by the pileup of its goods at European ports over quotas.

However, the U.S. side, which had been scheduled to head home Thursday, said the talks would go into a third day on Thursday.

"The United States and China continue to hold discussions on textiles trade in Beijing. Negotiating teams from both countries are set to reconvene talks at 8:30 a.m. (Thursday) in Beijing," said Neena Moorjani, a spokeswoman for U.S. Trade Representative Rob Portman in Washington.

Still, U.S. industry groups were not optimistic that both sides will be able to come up with an agreement in advance of a visit by Chinese President Hu Jintao to Washington next week.

"It appears that it's over this week, and no agreement has been reached," said Auggie Tantillo, executive director of the American Manufacturing Trade Action Coalition, who was in Beijing.

"The Chinese were not prepared to reach an agreement this week," he said. "The European situation did muddy the picture," he added.

In Europe, some 75 million pieces of Chinese-made clothing are stuck in customs houses for exceeding import limits, prompting European retailers to complain that their store shelves may go bare.

China's Commerce Ministry didn't comment on the talks Wednesday, but government-run media cited the European pileup as evidence that import quotas don't work.

"This trade fiasco demonstrates that protective measures, at best, are zero-sum games for those who resort to them," the official China Daily newspaper said in its lead editorial.

In Brussels, the EU head office said Wednesday there was growing consensus among member states to unblock the Chinese textile imports held up at Europe's borders.

Chinese shipments of sweaters, pants and other low-cost clothing soared after a worldwide quota system expired on Jan. 1.

Washington has already imposed temporary quotas limiting growth in imports of some Chinese textiles to 7.5 percent a year, and the talks Tuesday and Wednesday aimed to negotiate broader limits.

The U.S. Embassy had no comment on the discussions late Wednesday.

The dispute is politically sensitive at a time of soaring U.S. trade deficits with China, which last year hit $162 billion _ an all-time record high with any country.

Hu is to meet U.S. President George W. Bush on Sept. 7 in Washington.

U.S. clothing manufacturers say the flood of cheap Chinese goods since the beginning of this year has forced 19 U.S. plants to close and resulted in 26,000 lost jobs.

If no agreement is reached, U.S. manufacturers will continue to rely on the safeguard system which allows them to petition the U.S. government on a case-by-case basis for limits if imports are seen to be threatening American industry, Tantillo said.

Beijing argues that developed countries should focus on high-tech, big-money goods like airplanes and not try to stymie Chinese production of low-cost items like socks and underwear.

China also argues that the United States and its other trading partners are to blame the surge, because they failed to meet commitments to drop market barriers before the quota system ended on Jan. 1.

"The U.S. government's decision to yield to domestic protectionists has time and again egged them on to demand more and more," the China Daily's editorial said.

The U.S. trade deficit with China this year is running at a level 32 percent above last year's record pace, due largely to a 58 percent jump in clothing and textile imports.


LINK: http://www.washingtonpost.com/wp-dyn/content/article/2005/08/31/AR2005083102008.html