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U.S. Weighs Decision on China Imports

As the U.S. worked toward a broad apparel and textile trade deal with China, it prepared to rule on $975 million worth of safeguard petitions.

WASHINGTON — If American negotiators don’t reach a broad apparel and textile trade deal with their Chinese counterparts today, the U.S. will have to rule on six outstanding quota safeguard petitions covering about $975 million worth of goods or defer a decision on the cases again.

Earlier this month, the Bush administration delayed a final determination on the six safeguard cases, leaving open the possibility of new quotas on Chinese cotton and man-made fiber bras, knit fabric and other goods, as the two sides worked toward a long-term, comprehensive agreement. A decision on the cases, however, might not be made public until Thursday.

The possibility of more and immediate safeguards might push along the talks, which were set to continue for a second day in Beijing today.

“The U.S. government should certainly be prepared to invoke those safeguards,” said a spokesman for the American Manufacturing Trade Action Coalition, which has pushed for the restrictions. “One of the thoughts has been it would kind of be a slap in the face to China [if more safeguards are imposed], at least that’s how they would view it. On the other hand, the Chinese have had plenty of time to cut a deal.”

Also looming over the negotiations is a Sept. 7 meeting between Chinese President Hu Jintao and President Bush at the White House, where a host of issues — from intellectual property rights to appreciation of the yuan — likely will be on the agenda.

“That’s the ultimate driving point,” said Stephen Lamar, senior vice president of the American Apparel & Footwear Association. “If there’s a dispute still out there when the president comes, that sort of sours the visit a little bit.”

Special textile negotiator David Spooner, who is leading the U.S. delegation to Beijing, also sits on the interagency Committee for Implementation of Textile Agreements that imposed safeguards in May restricting $1.31 billion worth of Chinese imports to 7.5 percent growth this year.

A broader deal would replace the system of safeguard quotas that has vexed retailers and vendors trying to lay out sourcing plans. Domestic textile groups said safeguards are necessary to rein in Chinese apparel and textile imports, which jumped 46.6 percent to 7.9 billion square meters equivalent during the first half of the year.

This story first appeared in the August 31, 2005 issue of WWD.  Subscribe Today.

Chinese and American officials met in San Francisco two weeks ago and each presented what people familiar with the talks said were considerably different proposals. The U.S. called for low growth over a wide range of categories until the end of 2008, while the Chinese wanted much higher growth rates over fewer categories until the end of 2007.

It is unclear if China and the U.S. have been able to bring their positions closer together during the latest round of discussions. U.S. negotiators are keen to strike a lasting agreement, in contrast to the experience of the European Union, which has been working to renegotiate the deal it cut with China in June. That deal called for growth of 8 to 12.5 percent across 10 categories of goods through 2008. (See story, this page.)

“The Europeans clearly made a mistake, they negotiated an agreement that was far too restrictive,” said Brenda Jacobs, counsel for the U.S. Association of Importers of Textiles & Apparel, which opposes import restrictions. “The greatest fear we have is that the U.S. will repeat that mistake.”