US officials hail textile agreement with China

14 November 2005 00:00  [Source: ICB Americas]

TOP US trade officials hailed last week’s new US-China textile trade agreement, saying the deal will provide “stability and predictability” for US producers of synthetic and other textile products. The three-year trade agreement places quotas on 34 categories of Chinese finished textile products, beginning this coming January 1.

The agreement, hammered out in seven months of often tense negotiations in Washington and Beijing, replaces a batch of unilateral US limitations on imports of 19 categories of Chinese textile products. Those quota restrictions—called safeguard measures under World Trade Organization (WTO) provisions—were put in place earlier this year after a WTO agreement on textiles and clothing expired at the end of 2004 and exports to the US rose sharply.

US Trade Representative (USTR) Rob Portman said in a statement that the textile agreement with China “achieves the stability and predictability sought by our retailers but also by our textile producers, who understandably found it hard to plan in the face of unpredictable safeguards.”

According to the USTR office, the agreement imposes tighter quota limits on Chinese exports of “core” apparel products, such as cotton and synthetic shirts, trousers and undergarments, in 2006 than would have been possible under the existing WTO safeguard quota measures. The agreement’s quota restrictions in 2007 are “about the same” as those that could have been imposed under WTO safeguard rules, and the quotas are slightly higher in 2008 than the safeguard threshold levels.

The USTR office said that over the three-year term of the agreement, China’s textile exports to the US will be about 3.2 percent more than would have been allowed if WTO safeguard quotas were maintained for that period. But Portman also noted that the new agreement covers 34 textile product categories compared with the 19 categories covered under safeguard restrictions, and that the new trade deal provides more certainty than would be possible under sporadic safeguard measures.

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