US-China textile deal covers 34 categories

WASHINGTON - China has agreed to US import curbs on 34 textile and clothing categories through the end of 2008 under a pact that potentially could be signed this week in Geneva, a US industry official said.

"There's still some outstanding issues, but I think they'll be cleared up," said Cass Johnson, president of the National Association of Textile Organisations.

A textile trade pact would smooth over a sore spot in the US-China trade relationship before President George W Bush visits Beijing the middle of this month.

"However, nothing is agreed until everything is agreed," said Christine Baker, a spokeswoman for the US Trade Representative's office.

The United States is hopeful that remaining issues can be resolved, but "there is not a final deal" yet, Baker said.

China's exports of clothing and textile products to the United States jumped more than 50 per cent in the first eight months of the 2005 to nearly US$17.7 billion ($26.24 billion) following the end of a global quota system on January 1.

That prompted US textile producers to seek protection under a "safeguard" provision of China's 2001 entry into the World Trade Organisation. The measure allows WTO members to restrict the growth in imports from China to 7.5 per cent annually when there is a market-disrupting surge.

The Bush administration has imposed safeguard curbs on billions of dollar of Chinese clothing imports this years. But because the curbs have to be renewed annually, textile groups have pushed for a comprehensive agreement that would limit imports through 2008, when the safeguard provision expires.

US Trade Representative Rob Portman told reporters last week the two sides were close to an agreement after a fifth round of talks in Washington. If outstanding issues are nailed down, Portman and Chinese Commerce Minister Bo Xilai could sign the pact when they are in Geneva on Tuesday for a meeting aimed at pushing world trade talks forward.

"According to our information over the life of the agreement, China will receive only a minimal increase -- 3.8 per cent (in square meters) -- in market access in the 14 largest and most sensitive textile apparel categories as compared to the use of the safeguard," Johnson said in a statement.

Those include trousers, shirts, knits, underwear and bras. The quotas are expected to restrict the growth in those categories to 5.5 per cent in 2006, 7.8 per cent in 2007 and 10.3 per cent in 2008, compared to 7.5 per cent annually under the safeguard, an industry official said, speaking on condition he not be identified because details have not been announced.

Growth rates in the other 20 categories average about 10-12 per cent in 2006, 12-15 in 2007 and 16 per cent in 2008, the industry official said.

Johnson said his group was comfortable with the broad parameters of the agreement and pleased it would not bar the industry from filing additional safeguard requests in categories not covered by the pact.

- REUTERS