US, China said close to broad textile deal
(Reuters)
Updated: 2005-08-18 06:56

Since then, the Bush administration has blocked billions of dollars of shirts, pants and other clothing under a special textile "safeguard" provision that China accepted when it joined the World Trade Organization in 2001.

U.S. textile groups and lawmakers have pressed the White House for a comprehensive deal to restrict clothing imports from China through 2008, when the safeguard mechanism expires.

Spooner declined to provide specific details of the talks but said the United States was seeking a multiyear agreement broad enough to cover current safeguards as well as potential future ones. He said the United States offered a proposal on Tuesday and the Chinese made a counterproposal on Wednesday.

"The talks in the last couple days have gone very well," he said. "There have been productive meetings."

The U.S. has imposed quotas on a number of clothing categories that limit growth to 7.5 percent a year -- a rate U.S. textile manufactures would like to see in a final deal.

Import groups and retailers, however, say tough limits could drive up clothing costs for U.S. consumers and want to growth set at a much higher rate of at least 20 percent to 25 percent.

But Spooner said the entire private U.S. sector wants the Bush administration to pursue an agreement that lasts through 2008 to provide provide certainty to the marketplace.

The negotiations also follow a recent European Union deal with China that runs through end-2007 and allows for annual growth rates of 8 percent to 12.5 percent.

China rejected the idea of a comprehensive textile trade agreement last year but might now be more willing to sign a U.S. deal following its agreement with the EU.

Spooner said a deal would also benefit the Chinese because manufacturers would be able to make business decisions without the uncertainty of the United States invoking safeguards.

"They would prefer to have no limits on trade exports to the United States but what they hate even more is the fact they don't know how often and when we will invoke the safeguard," Spooner said.