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China, US near tough textiles accord
Updated: 2005-08-18 20:43

China and the U.S. grew closer to a deal to resolve disputes over textile exports between the heavyweight rivals, AFP reported.

A worker sews up a garment at a factory in Ningbo. The United States and China grew closer to a deal aimed at easing trade tensions between the two nations. [AFP]

Negotiators will reconvene, probably in China, by the end of August to "close a deal" aimed at easing trade tensions between the two nations, lead US negotiator David Spooner said after a two-day meeting ended in San Francisco.

"We agree on what the basic elements should be," said Spooner, special negotiator for textiles in the US Trade Representative's office.

"The devil is always in the details, we have yet to resolve what products would be covered, how big the quotas would be, that sort of thing, but the basic structure, I think, we agree on."

Sun Jiwen, deputy director-general of the foreign trade ministry who was leading the Chinese delegation here, said that the US and China remained at odds on certain points.

Sun said they would meet again to resolve the issues.

"There is some space between us, but tremendous progress was made defining issues," Spooner said after the talks concluded here. "Hopefully, we will come to a conclusion that will satisfy everyone."

Spooner said it was a "happy circumstance" that "the entire food chain," from US cotton growers to retail stores support an agreement that clarifies textile trade limits.

US textile industry representatives had joined US negotiators for dinner at a downtown seafood restaurant Tuesday, according to delegation members.

Sun invited Spooner to have a similar meeting with Chinese textile industry executives during the proposed China visit.

As the San Francisco textile talks ended, Spooner and Sun went to speak privately in another part of the hotel for about a half-hour.

Spooner said he wanted to "have a heart-to-heart" with Sun before they went their separate ways.

"We had some very frank discussions," Spooner said of the talks. "There is some space between us, but tremendous progress defining issues."

The US side presented the Chinese delegation with a proposal on Tuesday, and the China team responded with a "thoughtful and substantive" counter offer on Wednesday, Spooner said.

"Both sides are, I think, eager to solve this problem. But both sides say they'd rather take a little more time to reach a good deal rather than a hasty deal," Spooner told reporters.

The US government says Chinese textile imports have surged 54 percent since global quotas were scrapped on January 1, smothering domestic producers in a blanket of cheap Chinese garments with which they cannot compete.

The issue has inflamed trade tensions that are already simmering on a host of fronts, including Chinese currency reform and protection of US goods from counterfeit rivals in China.

While the European Union defused a potential trade war with China over textiles, the United States responded to the surge in imports by slapping quotas on a range of Chinese garments including shirts, trousers and yarn.

China retorts that US companies had years to prepare for the lifting of textile quotas in January but failed to take the opportunity to restructure.

It has the support of many US retailers, whose customers appear happy to buy Chinese-made clothes at bargain prices.

Sun suggested that textile industry representatives from both countries should meet to lessen the frictions.

"If we had more communication we would have less problems," Sun told the meeting through an interpreter. "And then we would not be needed."

The US textile industry wants an agreement that limits Chinese imports in more than 19 categories of apparel to a 7.5 percent growth rate per year until 2008.

That would be tougher than a deal reached by China with the EU in June that agreed to limit the growth of 10 Chinese textile products to the 25-nation bloc to between 8.5 and 12.5 percent until the end of 2007.

The American Manufacturing Trade Action Coalition kept up fierce lobbying for strict limits on China's textiles.

"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 the group's executive director, Auggie Tantillo.

"As a result, no deal is better than a bad deal."

Spooner refused to comment in detail on what the negotiations have entailed, beyond saying that the level of percentage caps that would apply to Chinese apparel imports "is certainly one of the sticking points".

But he said the United States wants any accord to last through to the end of 2008, when current US safeguards against Chinese textile imports allowed by the World Trade Organisation are due to expire.

If the EU experience is mirrored in the United States, an overarching deal with China on textiles may backfire.

German Economy Minister Wolfgang Clement Wednesday urged the EU executive to act quickly to solve problems caused by restrictions on Chinese textile imports that have left thousands of items of clothing blocked by customs.

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