- The Washington Times - Wednesday, August 17, 2005

U.S. and Chinese trade officials closed in on a comprehensive agreement to manage China’s apparel exports, but did not settle the running dispute after two days of talks that ended yesterday.

China’s exports of some clothing and fabric to the United States have skyrocketed since a global quota system expired Jan. 1, supplying more cheap clothes to consumers but harming domestic manufacturers as a result.

David Spooner, special textiles negotiator at the U.S. Trade Representative’s Office, and Jiwen Sun, deputy director general at China’s Department of Foreign Trade, met this week in San Francisco to negotiate a broad textile agreement.

“We hope to come close to an agreement this afternoon, but we are likely to need an additional meeting in order to close,” Mr. Spooner said yesterday during a break in the talks.

The additional meeting would likely be this month, though no date had been set, he said.

U.S. imports of some Chinese products — such as cotton socks, sweaters and slacks — have increased in volume by more than 1,000 percent since Jan. 1, when a quota system that since the 1960s had governed global apparel trade expired.

Through June, China exported $10.8 billion in textiles, apparel and yarn to the United States, a 67 percent jump from the like period in 2004, the Commerce Department said.

The exports have helped fuel economic expansion and job growth in China, but in the United States the textile and apparel manufacturers shed 25,300 jobs this year, leaving 657,800 in the industry, the Labor Department said.

U.S. apparel prices, meanwhile, are on a pace to decline by 6.5 percent this year, according to Consumer Price Index numbers for July.

To combat the rising imports, manufacturers have petitioned the Bush administration for caps on specific product lines.

The existing safeguard system, which China agreed to when it joined the World Trade Organization, limits imports of a specific product to 7.5 percent growth, but the application process is time-consuming, relief only lasts until the end of the calendar year, and each new restriction has agitated Chinese exporters and U.S. importers.

The Bush administration has imposed limits on seven categories of clothing and fabric since the start of the year and is considering 11 more.

U.S. manufacturers, retailers and Chinese manufacturers are eager to reach a broad agreement that would replace the safeguard system with a broad agreement that allows all parties to better predict trade flows.

“We’re seeking a multiyear agreement that is broad enough that it would cover both current safeguards and potential future safeguards,” Mr. Spooner said.

China earlier this year struck a deal with the European Union to limit U.S. imports of some Chinese products — such as cotton socks, sweaters and slacks — have increased in volume by more than 1,000 percent since Jan. 1.

Manufacturers want a stricter cap, allowing around 7.5 percent growth, to run through 2008 on multiple product lines, including the 18 already granted or under consideration for safeguards.

China and U.S. importers want a more liberal agreement.

“We would like to have some kind of certainty. But we are also looking for high growth rates,” said Laura Jones, executive director of the U.S. Association of Importers of Textiles and Apparel.

Mr. Spooner said the percentage increase in imports remained a sticking point in the talks.

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