By and  on August 1, 2005

GENEVA — U.S. Trade Representative Rob Portman said here Friday that the Bush administration is considering whether it will enter into formal negotiations with China on a broad pact to restrain growth in imports similar to the one reached in June between the European Union and China.

The China-EU accord set limited growth in Chinese textiles and apparel exports in 10 sensitive categories to between 8 and 12.5 percent annually until the end of 2007. A 7.5 percent annual growth cap is permitted under the World Trade Organization special China textile safeguards. The safeguard stipulation runs through 2008.

Asked whether the U.S. would seek a pact allowing imports to exceed the 7.5 percent restriction, Portman said: "We're still discussing that internally, whether we would enter into formal negotiations, as the EU did, to attempt to achieve that number, whatever it might be. The time period, of course, is another important variable, and we just have not made those decisions yet."

Portman, who was in Geneva to take stock of the stalled global trade talks and give some momentum from the U.S. side, said the administration is continuing to talk with the Chinese on the future of the textile safeguards. The Bush administration has already had two rounds of consultations with China, Portman noted.

He said the safeguards taken together, and the potential safeguards being reviewed or under petition, "amount to about 1.5 percent of total trade with China and only about 15 percent of our textile trade with China ... a very healthy and robust trading relationship," with a trade deficit approaching $200 billion a year.

The U.S. trade deficit with China reached a record $162 billion last year.

Portman said the surges in imports from China in percentage terms have been "even higher" than those experienced by the EU. He recalled that the U.S. has had increases of as much as 1,500 percent in certain categories.

With regard to the troubled Doha talks, Portman said a successful round "is extremely important not just for the United States, but again, for the global economy and particularly for the developing world."

The discussions are aimed at lowering barriers to the international flow of goods — including textiles, apparel, footwear and services — worth almost $11 trillion a year.With a crucial trade summit slated to be held in December to advance the round, Portman said, "We don't have the time and the luxury of time to be able to sit back."

Major differences over farm trade issues between the U.S. and the EU, and also between the transatlantic powers and major developing nations, such as India and Brazil, have bogged down the talks. Amina Mohamad, the ambassador from Kenya to the WTO and chairwoman of the trade body's ruling General Council, said the negotiations suffered from "inadequate political will ... We need leadership ... We are in trouble, and there's no point in hiding that."

Similarly, the departing WTO chief Supachai Panitchpakdi said the talks "need to shift gears."

Meanwhile, Rep. Robin Hayes, a Republican textile state lawmaker from North Carolina who cast a deciding vote for the controversial Central American Free Trade Agreement under pressure from the White House, is now pushing the Bush administration for a comprehensive agreement to restrict Chinese textile and apparel imports through 2008.

"... The agreement must cover products where China safeguard decisions are pending or have been accepted in the past, but more importantly, where China is having a disruptive impact on our domestic market," Hayes said in a letter to Portman. "It is also imperative that our domestic textile industry maintain the ability to file safeguard cases if Chinese surges begin in specific textile and apparel products that are not covered by the agreement."

Hayes, who capitulated to pressure from Republican leaders based on assurances to help the textile industry he said he received, changed his vote on CAFTA at the last minute Thursday, which pushed the trade accord over the finish line on a narrow 217-215 vote.

Besides the existing 7.5 percent growth cap on Chinese textiles and apparel imports to the U.S., American trade officials are currently reviewing safeguard quota requests from the domestic industry on another $944 million in Chinese imports and a few decisions are expected today.

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