- The Washington Times - Thursday, October 13, 2005

U.S.-China textile talks broke down yesterday with no agreement, prompting American manufacturers to seek unilateral curbs on imports and leaving retailers uncertain how much they can buy from China.

“We have not come to an agreement that meets the needs of our domestic manufacturers and retailers,” David Spooner, special textile negotiator for the Office of the U.S. Trade Representative, said after the fourth round of talks.

The two groups — manufacturers who compete with China and retailers who buy from China — have widely divergent agendas.

Both want an agreement that allows a stable market, but domestic producers are demanding stringent limits on a wide range of Chinese imports, while importers want the U.S. government to allow significant growth.

China’s exports of some types of clothing, fabric and yarn to the U.S. have surged since Jan. 1, when a global system of quotas expired under a decade-old World Trade Organization agreement.

U.S. manufacturers countered by asking the Bush administration for a series of new quotas, known as safeguards, covering more than 40 percent of all Chinese textile and apparel imports by value. Some already have been granted.

The safeguards limit imports to 7.5 percent growth for the year, protecting manufacturers but leaving retailers uncertain whether orders from China will be blocked at the border because they exceed quotas.

“Our overall goal, as we’ve said all along, is to reach a longer-term solution that will permit greater stability in textile and apparel trade,” Mr. Spooner said. He did not indicate whether the two sides made progress or planned to meet again.

China said it hoped to solve the problem with “an objective and calm attitude,” the Associated Press reported.

“It’s normal to have some frictions in the course of developing Sino-U.S. relations,” said China’s Foreign Ministry spokesman Kong Quan.

After the talks, U.S. industry sources immediately asked the Bush administration to slap quotas on 10 categories of clothing including sweaters, robes, wool trousers, swimwear, socks and curtains.

“In fact, the only thing that is certain is that the U.S. industry will continue to file and press for adoption of safeguard petitions in order to prevent China from its aggressive disruption of the U.S. market in 2006,” said Auggie Tantillo, executive director of the American Manufacturing Trade Action Committee, one of the industry groups that has filed the petitions.

The U.S. Commerce Department is expected to decide by the end of November whether to implement some of the safeguards.

In the meantime, retailers have been shifting orders out of China to other Asian nations, said Erik Autor, vice president and international trade counsel at the National Retail Federation, a trade group whose members include Liz Claiborne, L.L. Bean and Sears.

“The current situation, with a host of safeguard proposals being filed willy-nilly, is creating an unacceptable level of unpredictability for doing business in China,” he said.

Mr. Autor said the restraints on trade mean that consumers are paying more for clothing, though importers have been unable to say exactly how much more clothing costs.

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