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U.S. & China reach deal to limit textiles imports

By Michele SanFilippo

WASHINGTON – The United States and China announced a comprehensive agreement to limit U.S. imports of Chinese textiles and apparel products in 34 categories through the end of 2008.

Soft home categories covered by the deal include: thread, cotton towels, combed cotton yarn, knit fabric, special purpose fabric, polyester filament fabric, synthetic filament fabric, glass fiber fabric and blinds.

Growth rates will vary slightly from category to category, but in general for textiles products they are 12.5 percent in 2006 and 2007, and 16 percent in 2008. Base levels are lower than what they would have been for 2006 under normal safeguard renewal. For example, for the categories where safeguards are currently in place, China gets just an additional 4 percent growth over the life of the agreement than what they would have gotten provided that safeguard reapplications were approved on Jan. 1 of each year.

The agreement guarantees the reapplication of quotas each year through 2008 for all categories covered. According to U.S. manufacturing trade groups, there is still the possibility that they might file additional safeguard cases.

The combined value of total U.S. imports in the categories covered by the agreement is $33.4 billion for year-to-date 2005, with imports from China accounting for almost $5.1 billion of that total.

The value of Chinese imports covered by the petitions amounts to approximately 33 percent of the $15.4 billion in textiles and apparel imports from China and 8.5 percent of the $59.3 billion in imports worldwide in 2005. 

Karl Spilhaus, president of the National Textile Association, a trade group involved in the filing of safeguard petitions, added, “Today’s agreement vindicates the U.S. textile industry’s decision in 2003 to aggressively use the safeguard process to persuade all parties of the need for a comprehensive arrangement.”

“This bilateral agreement represents a necessary and welcome step towards addressing China’s unfair trade practices and highly disruptive levels of textile trade,” said Auggie Tantillo, executive director of the American Manufacturing Trade Action Coalition, another group seeking to limit imports from China.

Laura Jones, executive director of the U.S. Association of Importers of Textiles and Apparel, an anti-safeguard body, countered: “There is both relief and disappointment in the importing community. The good news is that there is some certainty, because there will be an allocation and visa system, so companies will know that if they order goods, they will get them – instead of the race to the dock that prevailed this year. On the other hand, the bad news is that while we can do business, it is a limited amount of business.”

Signing the agreement in London were Chinese Commerce Minister Bo Xilai and U.S. Trade Representative Rob Portman.

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