WWD.com/fashion-news/textiles/china-expected-to-seek-broad-textile-agreement-570350/
government-trade
government-trade

China Expected to Seek Broad Textile Agreement

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

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.”

The Bush administration has been pushing for tougher enforcement of intellectual property laws in China for years.

“If the Chinese are really willing to deal and are willing to be reasonable, I think there’s a pretty good chance that a [textile] deal gets done,” said a spokesman for the American Manufacturing Trade Action Coalition.

The Bush administration has leverage in the negotiations since it might impose more safeguard quotas, the spokesman said.

In a related development, a federal appeals court lifted an injunction issued by the Court of International Trade in December. The appeals court had stayed the injunction in April.

A lawsuit brought by the U.S. Association of Importers of Textiles & Apparel had sought to prohibit the government from reviewing safeguard petitions based on the threat of a market disruption. Other cases based on market disruption and not affected by the lawsuit proceeded as the threat-based cases were stalled.