U.S., China sign deal on China textiles The Associated Press/LONDON By JANE WARDELL AP Business Writer
NOV. 8 7:23 A.M. ET The U.S. and China signed a deal Tuesday limiting imports of Chinese clothing and textile products into the United States, ending three months of negotiations over the thorny issue.
U.S. Trade Representative Rob Portman and Chinese Commerce Minister Bo Xilai both described the deal as a "win-win" following a final round of talks here, but Bo later added that it was a "far cry" from China's original expectations.
The U.S. industry has been pushing for a deal to stem a flood of Chinese imports that began when global quotas were lifted in January, and Tuesday's announcement smooths over the trade relationship between the two nations just over a week before President Bush visits China on a state visit.
"We don't want to see such a small trade obstacle impede the overall trade and economic cooperation between the two countries," Bo said through a translator after signing the agreement.
Portman said the deal -- set to take effect Jan. 1 and cover 34 clothing and textile categories including 14 considered the most sensitive by the U.S. industry -- was fair to both countries, and called it an illustration of what "hard work" and "good faith" could accomplish.
"I believe this textile agreement is an example of how the United States and China do have the ability to resolve tough trade disputes in a manner that benefits both countries," he said.
Bo said the agreement was concluded after "practical and equal negotiations" and provided a "predictable and stable environment" for the textile industries in both China and the United States.
However, he also said the agreement would have a much greater impact on China's 20 million textile workers than the several hundred thousand workers in the United States.
"I know that Mr. Portman has shown some flexibility at the end of the day, but I don't think that's enough," Bo said. "That's still a far cry from our original expectations."
The Bush administration has imposed quotas, known as "safeguards," on billions of dollars worth of Chinese clothing and textiles imports this year to protect its own industry.
The safeguards were a provision of China's 2001 entry into the World Trade Organization, that allows WTO members to restrict the growth in imports from China to 7.5 percent annually when there is a market-disrupting surge.
However, the current safeguards do not cover all categories of the imported clothing and textiles and must be renegotiated each year, prompting U.S. textile producers to call for a more comprehensive deal lasting for three years when the safeguard provisions expire.
The agreement announced Tuesday would allow for imports of most clothing and textile categories covered by the deal to increase by 8 percent to 10 percent in 2006, by 12.5 percent in 2007 and by 15 percent to 16 percent for 2008.
In a victory for U.S. manufacturers, the agreement lasts through 2008, one year longer than a similar deal that China reached with the 25-nation European Union earlier this year.
U.S. textile industry officials have expressed support for the plan. U.S. retailers have said they would reluctantly go along with a comprehensive deal as long as the growth in imports was sufficient to let them obtain reliable supplies.
Portman dismissed suggestions that U.S. negotiators had been too generous to China. He said that U.S. manufacturers were pleased with the product coverage and the quota levels in consultations with government.
"This will enable us to have the predictability and certainty to retain and indeed be able to add jobs," he said. "Frankly speaking, this is a very good agreement for the American worker."
Portman said the delayed start date of the new deal would allow the backlog of hundreds of thousands of Chinese goods being held at U.S. ports to be eased through the system.
Portman and Bo were to travel to Geneva later Tuesday for talks at the World Trade Organization on a global trade deal.
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