WASHINGTON — Negotiators from the U.S. and China held a second day of apparel and textile trade negotiations Tuesday and continued to talk into the evening, but it was unclear how close they were to a deal at press time.

“The mood seems to be a lot more positive than it had been in the previous round,” said Stephen Lamar, senior vice president of the American Apparel & Footwear Association.

The two sides already have gone through several rounds of talks, trying to hammer out an agreement that would bring more predictability to the marketplace and regulate Chinese apparel imports for the immediate future.

Several sources with knowledge of the day’s dialogue said the Chinese negotiators were more willing to adjust some of their positions than they had been in the past.

“It sounds like they have made considerable progress compared to where they wound up at the end of the day [Monday], but considerable progress for the Chinese is baby steps,” said one representative of the domestic textile industry.

Going into this round, the U.S. was pushing for low growth levels on a broad range of goods through 2008, while China was pushing for higher growth rates and a 2007 end date.

Importers would prefer to see as little restriction as possible on trade, but are generally resigned to the notion of a deal that would replace the uncertain sourcing environment created by the current regime of safeguard quotas.

So far this year, the Bush administration has used safeguard quotas to restrict Chinese imports worth $1.9 billion to 7.5 percent annual growth. China agreed to the safeguards, which can be renewed through 2008, when it joined the World Trade Organization in 2001.

Safeguards are intended to protect U.S. producers from the flood of less-expensive imports from China that has occurred since WTO countries dropped the global quota system in January. For the first six months of 2005, Chinese apparel and textile imports shot up 48.8 percent to 9.43 billion square meter equivalents, worth $13.06 billion.

U.S. textile producers have applied to have the safeguards currently in place renewed next year and also to have filed petitions on several new categories.

This story first appeared in the September 28, 2005 issue of WWD.  Subscribe Today.