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US should not impose excessive trade limits
(China Daily)
Updated: 2005-08-19 09:58

China and the United States concluded a two-day round of negotiations over Chinese textile exports yesterday.

Although the two sides still have "substantial differences," according to China's Ministry of Commerce, some progress was reported to have been made through the talks.

After difficult encounters in June on the same topic, this round appeared to be much less confrontational.

Both sides want to solve the problem currently the most contentious in bilateral trade and reduce uncertainties for enterprises in the sector.

China signed an agreement with the European Union in June to curb growth of 10 categories of textile products that the nation exports. The move indicates the country is willing to make concessions.

The approach used in Sino-EU negotiations can be held up as an example for China-US talks to follow while US negotiators should refrain from being too aggressive when raising demands.

They are reported to be seeking an across-the-board curb on imports of Chinese textiles to cover products they believe could pose a threat to the American market in the future.

On the Chinese side, unlimited scope for restrictive measures is unacceptable.

The extent to which export growth should be restrained in each category is certainly also at the heart of the debate.

In Europe there is already a call for easing the 8-12.5 per cent growth limit stipulated in the China-EU agreement.

In the United States, traders advocate no less than a 20 per cent limit for Chinese textile export growth.

The US negotiators should listen to these voices when making their decisions.

US textile groups made a strong case in the first few months of the Sino-US dispute, which erupted in the first quarter of this year.

They linked the loss of US jobs to the country's huge trade deficits to Chinese textiles.

But after a trade of angry accusations, many Americans found benefits from moves against Chinese textiles would be limited in their ability to protect US textile jobs, because competition is not only coming from China. They also found textiles account for a tiny proportion of Sino-US trade.

At the same time, US groups whose interests would be hurt by the curbs - traders, retailers and cotton producers - have been making their opinions known.

Gary Hufbauer, a senior expert at the US Institute of International Economics, was quoted by American media earlier this week as saying consumers in the United States would have to pay US$6 billion more if the all-around restrictions on Chinese textiles the US negotiators have proposed are put in place.

With all of these points of view to consider, American decision-makers may need to rethink the necessity to ask for excessive concessions from the Chinese side in the next round of talks.

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