Deal May Limit Imports of Chinese Clothing, Textiles

WASHINGTON – Negotiators are close to a comprehensive agreement to limit imports of Chinese clothing and textiles into the United States, a U.S. official said Wednesday.

David Spooner, the administration's special textiles negotiator, said during a conference call that talks in San Francisco had allowed both sides to narrow their differences.

"We have had extremely productive discussions over the last two days and I am hopeful that we can wrap up, if not today, then at another meeting," Spooner said during a break in the discussions.

U.S. clothing and textile manufacturers are pushing for an agreement to halt a surge in Chinese imports (search) that began with the lifting of a system of global quotas that had been in place for three decades. U.S. producers say 19 textile plants have been forced to close and 26,000 jobs have been lost just this year.

Spooner said if another meeting is needed it will probably take place in China. He said Chinese authorities would like to reach an agreement before Aug. 31, when the administration is to decide on another round of petitions by the U.S. industry to re-impose quotas on individual clothing categories.

Economists say a broad-based agreement would raise clothing bills paid by American consumers, who have been enjoying a significant drop in prices this year following the end of the global quota system. That system had restrained how much apparel (search) and textiles (search) China could ship to the United States.

One estimate has put the potential higher costs to American consumers at $6 billion annually, or roughly $20 for each U.S. consumer.

The Bush administration has re-imposed quotas on various categories of clothing this year, but American manufacturers would prefer an agreement covering all areas of production that have been threatened by Chinese imports.

The United States has the power to impose limits on Chinese textile shipments through 2008 under the terms by which China was admitted to the World Trade Organization (search).

These new quotas are known as "safeguards" and are designed to cover clothing and textile categories that are being disrupted by heavy Chinese imports. They cap annual growth in the categories covered to 7.5 percent.

Spooner said U.S. negotiators presented a proposal to the Chinese on Tuesday, the opening day of the talks, and the Chinese presented a counterproposal on Wednesday. He would not go into specific details but he said the administration is seeking a comprehensive agreement that would cover all items now protected by safeguard agreements and any categories that might be candidates for future safeguards.

He said the U.S. side was insisting on a deal that would go through 2008.

The U.S. industry has attacked a comprehensive agreement that the 25-nation European Union reached with China this summer because it goes only until 2007 and allows annual increases in shipments of between 8.5 percent and 12.5 percent, growth rates that U.S. producers see as too generous.

U.S. producers said they were pleased that the negotiators were moving forward and that the administration's initial proposal covered a broad range of categories. But they said that key details remained to be resolved.

"We maintain our long-standing position that while the textile industry wants a comprehensive agreement, any agreement must be in the industry's best interest," said Auggie Tantillo, executive director of the American Manufacturing Trade Action Coalition, an industry group. "No deal is better than a bad deal."

American retailers, who have seen a variety of product lines from China cut off under the current safeguard system, are lobbying the administration to allow greater growth in shipments each year than the current safeguards provide.

Spooner would not discuss growth percentages but said that was one of the outstanding issues with the Chinese that needed to be resolved.