China recently raised the stakes in a trade dispute with the U.S. following the Bush administration’s decision to reimpose quotas on imports of bras, dressing gowns, robes and knit fabric under a special safeguard China agreed to when it joined the World Trade Organization. In 13 months, quotas on all apparel and textiles will be removed, and China is threatening to displace a majority of apparel and textile production around the globe. Facing a U.S. presidential election next year and dramatic job losses — particularly in the textile sector — the Bush administration ruled to control skyrocketing growth in imports from China by imposing restraints on the four categories. The U.S. and China must now sit down to negotiate the terms of the quota limits and growth rates, and domestic textile groups are exhorting the administration to negotiate a broader agreement with the Chinese that would cover more products for a longer period of time. Importers denounced the decision on quotas and oppose any additional restraints. As of Nov. 21, China had consumed more than 50 percent of its quota allocation in 70 of the 86 categories covered by quota. China is close to hitting the ceiling in many of those categories, a sign of the capacity it has been building in preparation for the day when all quotas are removed.

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