China, US sign textiles deal

The US government and textiles industry said overnight a hard-fought agreement with China would inject much-needed stability into the two nations' multi-billion-dollar trade in clothes and fabric.

In a statement from London after signing the textiles deal with Chinese Commerce Minister Bo Xilai, US Trade Representative Rob Portman said it was "fair to the industries in both countries".

The US trade chief said Bo's "constructive involvement" in months of negotiations showed "that the United States and China can resolve trade disputes in a manner that benefits both countries".

"We sought an agreement that achieves the stability and predictability sought by our retailers and textile producers, who understandably found it hard to plan in the face of unpredictable safeguards (quotas)," Portman said.

The two countries signed a three-year deal to limit 34 categories of Chinese exports of textiles and apparel to the US market, after they had rocketed this year to stoke trade tensions between the two major economies.

The agreement provides for a progressive increase in the Chinese imports until 2008 but would still cap their growth at far less than seen this year. Some imports, such as cotton trousers, have surged by more than 1,000 per cent.

"US textile and apparel manufacturing workers and their communities are big winners today," said Auggie Tantillo, executive director of the American Manufacturing Trade Action Coalition.

"This bilateral agreement represents a necessary and welcome step towards addressing China's unfair trade practices and highly disruptive levels of textile trade," he said.

The deal covers more than $US5 billion ($6.8 billion) worth of Chinese imports and could help shore up a US textiles industry that has lost nearly 400,000 jobs since 2001 due in part to fierce Chinese competition.

China's textiles exports have accelerated this year after a global quota system was scrapped on January 1.

In the absence of a comprehensive deal, the United States had been resorting to cumbersome quotas, or so-called safeguards, that will now be replaced by the caps allowed in the new agreement with China.

US National Textile Association president Karl Spilhaus said the accord "vindicates the US textile industry's decision in 2003 to aggressively use the safeguard process to persuade all parties of the need for a comprehensive arrangement".

US Commerce Secretary Carlos Gutierrez said the agreement "will provide certainty to our domestic manufacturers, importers and their employees".

"It also demonstrates our commitment to working within the WTO (World Trade Organisation) process to resolve differences with our trading partners," he said.

"Today's agreement also highlights the value we place on aggressively enforcing our trade agreements to provide a fairer and more certain trading environment for American businesses and American workers."

Major US importers of Chinese clothes also welcomed the stability the new agreement will provide until 2008.

"That's one of the real advantages of this agreement. It will enable us to really plan for the future with much more certainty," said Bill Dertz, a spokesman for the world's biggest retailer, Wal-Mart Stores.

"We were supportive of the agreement and pleased to see it signed," he told AFP.

For apparel categories, the agreement provides for annual growth rates in Chinese exports of 10 per cent in 2006, 12.5 per cent in 2007 and 15 per cent in 2008.

For textile products, the rates are 12.5 per cent in 2006 and 2007, and 16 per cent in 2008.

Afr.com