WASHINGTON — The Bush administration tightened restrictions on $556.4 million in Chinese imports as negotiators failed to reach a broad import agreement at their fourth round of talks in Beijing.
Bras and synthetic filament fabric now join seven other types of Chinese goods restricted in the U.S. market by safeguard quotas, which hold imports to 7.5 percent growth for the rest of this year and can be renewed through 2008. In all, the U.S. is restricting $1.9 billion in Chinese imports with safeguards.
Hope is not lost for the long-sought-after deal, which would replace safeguards and would bring more clarity to the sourcing scene by mapping out the scope of imports. The U.S. has pushed for a deal that would hold a broad range of categories to low growth through 2008, while China wants higher growth rates on a narrower group of goods through 2007.
The two sides plan to meet again, though a date has not been set, and the Bush administration pushed back decisions on four safeguard cases until Oct. 1.
“While we are pleased that the U.S. government approved two [safeguard] cases, we are disappointed that the U.S. government delayed decisions on some of the other cases,” said National Textile Association president Karl Spilhaus, in a statement. “People are hurting and need safeguards.”
The lack of an agreement is expected to make apparel and textile trade a key issue at a meeting between Chinese President Hu Jintao and President Bush at the White House on Wednesday.
“There’s no question that it will be on the agenda and my guess is that it will be the Chinese putting it on the agenda,” said a spokesman for the American Manufacturing Trade Action Coalition, which has strongly pushed for safeguards.
“Whatever happens out of this visit likely will have an impact on whether or not a deal ends up being done,” he said. “You’re seeing a bit of brinksmanship here by the Chinese.”
Encouraged by a chorus of Congressional voices, the Bush administration has been pushing China on what it sees as a series of unfair trade advantages, including an undervalued yuan and weak enforcement of intellectual property rights.
This story first appeared in the September 2, 2005 issue of WWD. Subscribe Today.
“There were some expectations that a deal could be done before the president of China visits Washington next week, but it’s clear that’s not going to happen at this point and that’s unfortunate,” said Mark Jaeger, senior vice president and general counsel at Jockey International.
However, Jaeger said he is still optimistic that a deal, which would greatly simplify sourcing plans, will be reached.
A broad agreement carries the promise of different things for domestic textile firms on one side and apparel importers on the other.
Domestic textile and apparel manufacturers, having already cut 389,000 jobs since January 2001, are looking for a highly restrictive deal to stem the tide of Chinese imports, which are up 46.6 percent by volume since global quotas were eliminated eight months ago.
Importers and retailers, contending with cutthroat competition for the shoppers’ dollar, want the deal to clear the way for them to use more Chinese-made goods that would help them cut costs. They also want a deal to provide a smooth transition into the post-quota world.
“We need this agreement to reflect commercial realities and not try to put the genie back in the bottle and try to go back to the old quota system,” said Julia Hughes, vice president of international trade at the U.S. Association of Importers of Textiles & Apparel.
All of the parties involved want the Bush administration to come up with a deal that sticks, unlike the European Union’s deal with China, which has EU retailers up in arms and goods stuck at the ports.
“There’s a desire on both sides [the U.S. and China] to reach an agreement and perhaps that’s one of the reasons the safeguards on those four categories are being postponed,” said Ira Kalish, Deloitte Research’s global director of consumer business.