Negotiations Continue On Textile Trade Agreement

Negotiations Continue On Textile Trade Agreement. Although US and Chinese trade officials have been
unable to agree on a comprehensive textile trade agreement, both sides say an agreement is possible
and they will meet again, probably later this month. Following two days of negotiations last week,
it was apparent that fundamental differences remain, but everyone involved US textile
manufacturers, importers of clothing and textiles and both governments would like to resolve what
has become a highly contentious issue. With Chinese President Wu Jin Tao scheduled to meet with
President Bush in Washington in September, both governments would like to have a pact wrapped up
then. Following the first round of negotiations, a spokesman for the US Trade Representative said,
Both China and the United States will continue to work towards a broad solution that would provide
greater certainty for the textile market. He said the United States would like to reach a deal
soon, but we are not interested in a bad deal. The Chinese Ministry of Commerce issued a statement
saying, Because the two sides still have substantial differences in some matters of principle, the
two sides have agreed to continue discussions on this issue and jointly seek a way to resolve it.An
editorial in the China Daily, which is an unofficial voice of the Chinese government, warned that
the United States should not make what it called excessive demands and suggested that the
negotiators should agree on a pact similar to the one China reached with the European Union last
June. That agreement set annual quota growth of 8 to 12.5 percent on a number of sensitive product
categories. Under the safeguard mechanism that the US government has been using since quotas were
removed last January, there is a 7.5-percent annual growth limit on products that it has determined
to cause or threaten to cause market disruption. US importers of textiles and clothing say that
level is too restrictive, and they would like to see something on the order of 20 to 25 percent.As
the negotiations continued, Laura Jones, executive director, US Association of Importers of
Textiles and Apparel, said: We need some kind of certainty. We need to know if we place orders, we
will be able to bring them in.

James A. Morrissey, Washington Correspondent
August 2005