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Moving to control surging imports of clothes from Asia, the United States signed an agreement with China here on Tuesday placing quotas on items including cheap shirts and trousers over the next three years.
The deal raised the volumes of clothing that the United States would accept from China when compared with previous arrangements, but it placed limits on those volumes and included a wider range of products than those already subject to restrictions. The U.S. trade representative, Rob Portman, said that the deal was "fair to our retailers and our consumers" and that it pointed the way for resolving future trade disputes with China. The accord also solves a major point of contention between the countries less than two weeks before President George W. Bush travels to China. The Chinese commerce minister, Bo Xilai, hailed the deal as a success after five months of negotiations and seven rounds of talks. "On some of the negotiations, we were almost at the edge of the cliff," said Bo, who appeared next to Portman for a signing ceremony in London. But Bo took a critical tone toward quotas and called on developed countries to be far more sensitive to the need for China to prosper through free trade. About 20 million workers rely on textiles for their living in China, compared with just a fraction of that number in the United States, Bo said. The textile industry in China has "a greater impact, much more greater than in the U.S.," he said. "Ambassador Portman has shown some flexibility at the end of the day," he said, "but I don't think that's enough. Actually that's still a far cry from our original expectations." Surging clothing exports from China this year prompted complaints from American textiles producers and labor unions, and the Bush administration has imposed a series of emergency "safeguard" measures over the past year that have limited growth to 7.5 percent annually. Under Tuesday's agreement, clothing imports would be allowed to grow 10 percent in 2006, 12.5 percent in 2007 and 15 or 16 percent in 2008. The new terms apply to more than 30 products. The United States would also move to release clothing piled up at American ports, although socks could remain impounded for longer, a U.S. official traveling with Portman said. More than half of the socks sold in the United States are made domestically, and the sector remains a particularly sensitive one for manufacturers, the official said. To avoid stockpiles at ports in future disputes, China could borrow from quotas in following years, or, if such borrowing was not possible because those quotas also were exhausted, then the customs authorities still could decide to lift restrictions, the U.S. official said. The unilateral U.S. imposition this year of limits on many categories of garments, and the threat of limits on further categories, have prompted multinationals like Wal-Mart Stores to be wary of placing large orders with Chinese manufacturers, fearing that shipments would be stopped at ports. The uncertainty turned many in China's textile and apparel industry into unlikely supporters of a deal between the United States and China, even a deal that would limit Chinese exports. "For me, it is very good - the most important thing is, we know what will happen in the market," said Henry Ye, chairman of Smartex Far East, which makes windbreakers for the U.S. and Chinese markets and is based in Xiamen, China. In many ways, the big negotiating breakthrough in textiles and apparel came not this week in London but in June in Shanghai, when Chinese negotiators reluctantly agreed to limit shipments of clothing and apparel to the European Union. After that decision, trade experts said, a similar deal with the United States was only a question of time and of ironing out many details. In one important detail, the United States obtained an even more stringent agreement than the European Union did. The American pact limits Chinese exports through 2008, whereas European negotiators were only able to obtain a deal through 2007. Tuesday's agreement clears away a persistent irritant this year in Chinese-American relations. But many remain, including China's rapid military buildup in coastal provinces facing Taiwan, China's reluctance to let its currency appreciate more than a few hundredths of a percent each week and the swift increase in China's trade surplus with the United States in a long and growing list of industrial products, from DVD players to dolls. The American trade deficit with China widened to $126.2 billion in the first eight months of this year, compared with $98.8 billion a year earlier. Chinese exports to the United States have exceeded Chinese purchases of U.S.-made goods by nearly seven to one this year. Textiles and garments do not even represent the biggest category of the American trade deficit with China. Bigger deficits have appeared in trade in machinery, electronic gear and furniture. But textiles and garments became a problem for bilateral trade relations because American manufacturers and their workers in the industry have unusual political influence in Washington and because international trade in textiles and apparel is covered by special rules. The textile and garment industry and their employees are heavily concentrated in the American South but have flirted over the years with both the Republican and Democratic parties. Both parties have actively pursued the industry's interests during and between election years as a result. Chinese officials have vigorously denounced limits on their exports as protectionism and strongly objected to American and European pressure on them to impose limits. But the United States and other countries allowed China to join the World Trade Organization in November 2001 only after China agreed that other WTO members would be allowed to restrict Chinese textile and apparel exports through 2008 if these exports surged and disrupted markets. When countries around the world in January dismantled the system of quotas that had governed global textile trade for decades, Chinese exports soared in many categories, rising tenfold or more in some categories in which they had been held to low levels. The United States responded by imposing limits in a series of categories; under U.S. trade law, these limits rise only 7.5 percent a year. The limits grated on Chinese officials. "The United States' frequent implementation of restrictive measures on China's textile products according to Article 242 of China's Protocol of Accession to the WTO has created tremendous instability in the textile trade of both nations and affected the development of regular and orderly textile trade," Bo, the Chinese commerce minister, said on Tuesday. Source: www.iht.com Nov 8, 05 |
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