US And Chinese Trade Officials Say No To Renewed Quotas

US and Chinese trade officials have made it clear that they are not going to negotiate a new
comprehensive bilateral quota agreement on textiles and apparel. While US textile manufacturers
have been pressing for such an agreement, Under Secretary for International Trade Grant Aldonas
says any such agreement simply is not in the cards. He said the Chinese have been categorical in
their rejection of new quotas contending that their imports are not enough of a threat to the US

Last December, the US government placed quotas on three categories of textiles and apparel
under the so-called safeguard mechanism in the US/China bilateral agreement. The action limits
growth of imports of knit fabric, dressing gowns and brassieres to 7.5 percent for this year. Since
US textile manufacturers contend Chinese imports are surging in many other product categories and
the situation will only get worse when all quotas are removed by years end, they are seeking a
comprehensive quota agreement. According to the US Department of Commerce, Chinese imports of
textiles and apparel have increased last year by 67 percent over 2002, giving China about 20
percent of the US market.

Predicting that there will be continuing friction between the United States and China with
respect to rising textile imports, Aldonas said the United States will continue to address problems
using tools other than quotas or punitive tariffs.

May 2004