- The Washington Times - Tuesday, November 8, 2005

From combined dispatches

The United States and China reached a three-year agreement yesterday to rein in billions of dollars worth of China’s clothing and textile shipments to the United States, solving an issue that had strained trade ties.

The pact, reached just over a week before President Bush visits Beijing, limits Chinese shipments in 34 clothing and textile categories — including trousers, shirts, underwear and bras — through 2008.

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

U.S. Trade Representative Rob Portman and Chinese Commerce Minister Bo Xilai both said they were pleased with the deal after a final round of talks in London, but Mr. Bo added that it was a “far cry” from China’s original expectations.

In the United States, groups representing clothing and textile manufacturers hailed the agreement, but some retailers expressed disappointment that the annual increases were not larger.

The U.S. industry has been pushing for a deal to stem a flood of inexpensive Chinese imports that began when global quotas were lifted in January, and yesterday’s announcement smooths over the bilateral trade relationship before the Bush visit.

“We don’t want to see such a small trade obstacle impede the overall trade and economic cooperation between the two countries,” Mr. Bo said through a translator after signing the agreement.

Mr. Portman said the deal — which is set to take effect Jan. 1 and includes 14 categories considered most sensitive by the U.S. industry — was fair to both countries and called it an illustration of what “hard work” and “good faith” can 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.

The agreement would allow for imports of most 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 in 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.

Jim Chesnut, chairman of the National Council of Textile Organizations, said the deal reassured Americans that China wouldn’t be able to flood the U.S. market with clothing in the next three years.

“This agreement is a victory for hardworking U.S. textile workers,” he said.

Auggie Tantillo, executive director of the American Manufacturing Trade Action Coalition, another industry group representing textile and clothing manufacturers, said: “U.S. textile and apparel manufacturing workers and their communities are big winners today. This bilateral agreement represents a necessary and welcome step towards addressing China’s unfair trade practices and highly disruptive levels of trade.”

But representatives of U.S. retailers said the limits on future imports were overly restrictive.

“Instead of terms that ensure that there is a true transition to unrestricted trade after 2008, the agreement imposes tight quotas on the products of greatest importance to American families: shirts, pants and underwear,” said Laura E. Jones, executive director of the U.S. Association of Importers of Textiles and Apparel.

Mr. Bo said the agreement was concluded after “practical and equal negotiations” and provided a “predictable and stable environment” for the textile industries in both countries.

However, he said the agreement would have a much greater effect 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,” Mr. 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 U.S. industry.

The safeguards were a provision of China’s 2001 entry into the World Trade Organization that allows members to restrict the growth in imports from China to 7.5 percent annually when there is a market-disrupting surge.

However, the 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 three years when the safeguard provisions expire.

Mr. 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.

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