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U.S. and China Agree To Extend Meetings

Talking for a second day in Beijing, U.S. and Chinese negotiators failed to produce an apparel and textile import agreement, but will meet again today.

WASHINGTON — Coming together for a second day of talks in Beijing, U.S. and Chinese negotiators failed to produce an apparel and textile import agreement, but did agree to extend their meeting into today.

A deal would replace the uncertainty of intermittent safeguard quotas with a long-term plan for managing Chinese imports into the U.S., as the two countries shift into the post-quota world. Even though all World Trade Organization countries dropped textile and apparel quotas on Jan. 1, they were still allowed to impose safeguard limits on China if surging imports from the manufacturing powerhouse caused, or threatened, disruption to domestic industries.

The U.S. has already imposed safeguard quotas this year on $1.31 billion worth of goods, limiting annual growth to 7.5 percent.

There was still considerable distance between the two sides before their final meeting Wednesday, and reaching a deal today is far from a certainty, said U.S. groups following the negotiations from here and Beijing.

The sticking points included whether the deal would run through 2007 or 2008, when the China safeguard caveat expires, and if the U.S. could go back later and restrict imports of goods not covered under an agreement, said two people familiar with Wednesday’s talks.

At press time, the Bush administration had not made public whether it would impose additional safeguard quotas covering about $975 million worth of goods. The interagency Committee for the Implementation of Textile Agreements had until midnight to either enact the safeguards, reject the six petitions or delay a decision, as it did on Aug. 1.

Three textile trade groups favoring restrictions on China — the American Manufacturing Trade Action Coalition, the National Council of Textile Organizations and the National Textile Association — released a statement Tuesday morning that a comprehensive agreement had not been reached.

The statement also lauded efforts of the U.S. delegation, led by special textile negotiator David Spooner, indicating that so far the U.S. had stuck to its proposal that an agreement include a broad range of goods with low growth rates through 2008. China has apparently pushed for much higher growth rates over fewer categories through 2007.

“The Chinese are just being obstinate,” said Missy Branson, senior vice president of the NCTO. “The [U.S.] government held firm and it looked out for the U.S. industry’s interests.”

This story first appeared in the September 1, 2005 issue of WWD.  Subscribe Today.

In the absence of a deal, textile groups vowed to push for further restrictions on China, which has been on an import tear with growth of 46.6 percent in the first half to 7.9 billion square meters equivalent. The domestic groups fear that a failure to curtail China’s exports will result in further job losses in the beleaguered sector.

But importers charge that free-trade restrictions hurt the economy.

“An agreement has to reflect the interest of the U.S. as a whole,” Laura Jones, executive director of the U.S. Association of Importers of Textile & Apparel, said in a statement. “That includes importers and retailers, who account for millions of jobs, and American families, who will bear the brunt of increased prices for essential clothing purchases.”