By  on June 29, 2005

WASHINGTON — China is likely to push for a broad agreement regulating textile and apparel imports to the U.S., Commerce Secretary Carlos Gutierrez said Tuesday.

Gutierrez is to discuss trade issues with his Chinese counterparts at a July 11 meeting of the U.S.-China Joint Commission on Commerce and Trade.

"Their big 'ask' is going to be a comprehensive agreement on textiles," Gutierrez said during a conference call with members of the National Association of Manufacturers. Other issues likely to come up include market access, government procurement of software and intellectual property rights.

An official at the Chinese embassy here had no comment.

Chinese imports to the U.S. in the textile and apparel area since the World Trade Organization eliminated quotas in January shot up 45 percent to 4.71 billion square meter equivalents through April.

To stem this tide, the U.S. imposed safeguard quotas on $1.31 billion worth of imports, limiting growth in seven categories of goods to 7.5 percent annually. The safeguards, intended to protect the domestic market from disruption, are renewable each year through the end of 2008.

Safeguards bring a considerable amount of uncertainty since they have to be reimposed and also could be applied to additional categories of goods.

In an effort to smooth out their own trading relationship, the European Union and China this month hammered out a deal limiting 10 categories of Chinese apparel imports to annual growth of 8 to 12.5 percent through the end of 2007.

The U.S. decision to curtail the imports with safeguards has ratcheted up internal political pressure on Chinese officials, who Gutierrez said appeared "jolted" by the move during meetings earlier this month.

"It wasn't just a negotiating stance," he said. "On one hand, they were caught off guard by the decision itself, and then locally, they were just going out of their way to make sure their people knew, and their workers, that it was our fault, that they disagreed. So they're really looking for political cover."

At the recent meetings, he said, the Chinese "were using textiles as their way of keeping us on our back foot and we used [intellectual property rights] so it was really a good way of balancing our discussions and not letting them get the upper hand with textiles."

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