US, China reach textile agreement
(Reuters)
Updated: 2005-11-08 16:31

LONDON, Nov 8 (Reuters) - The United States and China reached agreement on Tuesday on China's booming clothing and textile shipments to the United States.

Chinese shopkeepers prepare their merchandise at a textile market in Shanghai in this October 13, 2005 file. [Reuters/files]

U.S. Trade Representative Rob Portman and Chinese Commerce Minister Bo Xilai announced the deal at a joint news conference in London and hailed it as a success for both sides.

"I believe the textile agreement shows our ability to resolve tough trade disputes in a manner that benefits both countries," Portman said.

The accord is aimed at smoothing over a rough spot in the US-China trade relationship before President George Bush visits Beijing in 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 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 Organisation. 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.

The Bush administration has imposed safeguard curbs on billions of dollars 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 until 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.