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US And China Negotiate Textile Import Agreement

Washinigton Outlook

James A. Morrissey, Washington Correspondent

US And China Negotiate Textile Import AgreementTrade officials from the United States and China met in San Francisco August 16-17 to negotiate a comprehensive agreement covering imports of textiles and apparel. Any new agreement would be intended to replace the use of the safeguard mechanism that the US government and industry have been using to impose quotas on products where it has been demonstrated that imports are disrupting the US market. The negotiations were scheduled after US trade officials consulted textile industry leaders and members of Congress who have been calling for a comprehensive agreement. The consultations were an apparent payback by the Bush administration for key votes by textile state members of Congress supporting the Dominican Republic-Central American Free Trade Agreement..Going into the negotiations, US Special Textile Negotiator David Spooner said, In our numerous consultations with our domestic textile and apparel industries and members of Congress, we hear unambiguous calls for a more comprehensive approach to textile trade with China. The Chinese government objected strongly to the use of the safeguard mechanism and US importers of textiles and apparel were equally unhappy, because it created uncertainty surrounding their sourcing decisions.The negotiations took place as the US Department of Commerce released trade data through June that showed imports of textiles and apparel from China were up by 47 percent over the same period of 2004, and that China currently accounts for 29 percent of the US market for textiles and apparel.On the eve of the negotiations, the National Council of Textile Organizations (NCTO) issued a statement calling for a sweeping long-range program to deal with Chinese imports that have surged since import quotas were removed last January. It called for a comprehensive bilateral agreement that would put sensitive products under quota control through 2008, when the right to use the safeguard mechanism to impose quotas on individual product categories expires.Calling a new bilateral agreement a temporary fix, the NCTO called for passage of legislation pending in Congress that would provide for tariffs that would help offset a subsidy to Chinese imports as a result of currency manipulation. The NCTO also would like to see legislation that would permit use of countervailing duties on products from stat-controlled economies, such as China, but also would extend to Vietnam.In connection with the upcoming Doha Round of trade liberalization negotiations, the NCTO would like to see a permanent safeguard mechanism to address unique problems posed by non-market economies such as China, and it is strongly opposed to any textile and apparel tariff reductions until other countries lower theirs to current US levels.In addition, the NCTO reports that as the US government moves forward with additional bilateral or regional free trade agreements, there should be no loopholes such as tariff preference levels that permit non-participating countries to benefit from special tariff concessions.The NCTO statement said Chinas trade practices represent the single greatest threat to the livelihoods of textile workers around the globe.At the conclusion of the negotiations, UStr Spokesperson John Stubbs said: "We have just completed two days of productive talks with China on a broad textiles agreement, and we plan to meet again soon. Details regarding this meeting will be finalized in the coming days. Both China and the United States are working towards a broad solution that provides greater certainty for the textiles market. The U.S. would like to reach a deal soon, but we are not interested in a bad deal. Throughout this process we are closely consulting with domestic manufacturers and retailers, as well as with Congress. We look forward to meeting with the Chinese to resume talks soon."

By James A. Morrissey, Washington Correspondent August 2005