US, China expected to sign textile deal Tuesday

US, China expected to sign textile deal Tuesday
Mon Nov 7, 2005 7:30 PM ET

By Doug Palmer

WASHINGTON (Reuters) - The United States and China are expected to sign a three-year agreement on Tuesday reining in China's booming clothing and textile shipments to the United States, a congressional aide said on Monday.

U.S. Trade Representative Rob Portman and Chinese Commerce Minister Bo Xilai are both in London for meetings related to world trade talks. They are expected to hold a bilateral meeting on Tuesday morning and sign the pact, said Carolyn Hern, a spokeswoman for Rep. Robin Hayes, a North Carolina Republican who has been a leading congressional advocate for such a pact.

"They are expected to sign it about 2 or 3 a.m. (EST) our time," Hern said.

A spokeswoman for the U.S. Trade Representative's office would only confirm that Portman and Bo will hold a joint news conference on Tuesday morning in London.

A textile agreement would smooth over a rough spot in the U.S.-China trade relationship before President George W. Bush visits Beijing the middle of this month.

China's exports of clothing and textile products to the United States jumped more than 50 percent in the first eight months of the 2005 to nearly $17.7 billion following the end of a global quota system on January 1.

That prompted U.S. textile producers to seek protection under a "safeguard" provision of China's 2001 entry into the World Trade Organization. The measure allows WTO members to restrict the growth in imports from China to 7.5 percent annually when there is a market-disrupting surge.

SEEKING COMPREHENSIVE PACT

The Bush administration has imposed safeguard curbs on billions of dollar of Chinese clothing imports this year. But because the curbs have to be renewed annually, textile groups have pushed for a comprehensive agreement that would limit imports through 2008, when the safeguard provision expires.

Cass Johnson, president of the National Council of Textile Organizations, said on Sunday the new textile agreement was expected to restrict 34 categories of clothing and textile imports from China through 2008.

China is expected to "receive only a minimal increase -- 3.8 percent ... -- in market access in the 14 largest and most sensitive textile apparel categories as compared to the use of the safeguard," Johnson said.

The quotas for those 14 categories -- which include trousers, shirts, knits, underwear and bras -- are expected to grow 5.5 percent in 2006, 7.8 percent in 2007 and 10.3 percent in 2008, compared to 7.5 percent annually under the safeguard.

Growth rates in the other 20 categories are expected to average about 10 percent to 12 percent in 2006, 12 percent to 15 percent in 2007 and 16 percent in 2008, an industry official said.

Hayes and U.S. textile industry groups have scheduled an afternoon news conference on Tuesday to discuss the pact.

"He's very excited about the announcement," Hern said. "Robin was pushing for this agreement for the benefit of the industry. If they're happy, he is."

Hayes helped the Bush administration several months ago win approval of a free trade agreement with Central America opposed by vocal portions of the textile industry by agreeing in the very last minutes of a House vote to support the pact.

He explained afterward that he voted for the U.S.-Central American Free Trade Agreement after receiving assurances that the Bush administration would take action to deal with mounting textile and clothing imports from China.