U.S. Eyes Textile Pact with China

The Bush administration said yesterday that it would discuss a comprehensive agreement to limit imports of clothing and fabric from China, a potential reprieve for U.S. manufacturers and a step to smooth trade relations with China.

U.S. imports of some Chinese products -- such as cotton socks, shirts and pants -- have increased in volume by more than 1000 percent since Jan. 1, when a global system of quotas expired.

U.S. producers say the flood of Chinese imports is costing jobs and ruining companies, and they have filed a series of petitions to limit specific products. The administration has responded to seven petitions with import caps this year, helping manufacturers but creating uncertainty for importers and retailers, and irritating China.

Commerce Secretary Carlos Gutierrez said yesterday that the administration would "engage in substantive discussions with our domestic textile and apparel industries and members of Congress on whether there is interest in a broader textile agreement with China."

China appears willing to negotiate some trade limits.

"On the issue of China-U.S. textile trade, China is ready to have dialogue with the U.S. in an earnest and open way," said Lu Jianhua, director general of China's Department of Foreign Trade at the Ministry of Commerce.

U.S. industry and political leaders also say they want a broad agreement.

"I cannot stress to you how critical it is to reduce these damaging Chinese surges to help protect our domestic textile industry and its work force," Rep. Robin Hayes, North Carolina Republican, said in a July 29 letter to U.S. Trade Representative Rob Portman.

Mr. Hayes last week cast a critical vote in favor of the Central America Free Trade Agreement after he received assurances that the administration would work to protect manufacturers in his district from Chinese imports.

Industry and administration sources said there was no direct quid pro quo on new quotas in return for a vote, but acknowledged that China repeatedly came up during discussions of CAFTA.

Mr. Hayes and industry groups welcomed yesterday's announcement.

The Commerce Department did not offer proposals for a broad agreement, though China repeatedly has referenced a recent deal with Europe that set new quotas on 10 clothing categories through 2007. Industry groups want more product lines and a longer time frame.

"A fair deal would limit the growth of Chinese imports to very close to 7.5 percent and should last through the end of 2008," said Auggie Tantillo, executive director of the American Manufacturing Trade Action Coalition.

The Bush administration has imposed limits on seven categories of clothes and fabric since the start of the year and is considering 11 more.

The safeguards cap imports at 7.5 percent, but industry groups must go through a time-consuming application and then receive protection only through the end of the calendar year.

Through May, China exported $8.2 billion in textiles, apparel and yarn to the United States, a 62 percent jump, according to the Commerce Department. From January to June, the industry shed 21,500 jobs, leaving 657,400 in the U.S., the Labor Department said.



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