Textile frictions await fresh talks
By Jiang Wei (China Daily)
Updated: 2005-06-23 08:35

The second round of Sino-US negotiations over textile frictions will open soon, China's Ministry of Commerce says.

As well as the seven categories of Chinese textile products restricted by the US Government, this round of talks is expected to cover another six categories on which curbs are being considered.

An exact timetable for negotiations is not yet available.

Earlier reports said they would start this Saturday in Beijing, and it was likely to involve higher-ranking officials than last Friday's from both countries.

"It is essential for the two countries," said Cao Xinyu, Vice-Chairman of China Chamber of Commerce for Import and Export of Textiles. "Because deadlines for the United States to apply new curbs to these categories are just at the end of this month."

Under US Government procedures, the country should decide whether to launch formal consultations with China concerning these categories and place restrictions on them after a 15-day public appraisal, he said.

His chamber would establish an inspection mechanism in a couple of days' time to watch the growth of exports in these categories, he said.

The chamber would at least keep firms informed of the clearance rate in the United States in case the restrictions were imposed.

"The two sides will perhaps not be able to reach an agreement in this session, although China expects to make a deal as soon as possible," he said.

The results of the consultations would mainly depend on the attitude of the United States and whether it understands the significance of the textile industry to China, said Mei Xinyu, a researcher with the Chinese Academy of International and Economic Co-operation.

Experts also warned that it was more difficult for China to reach an agreement with the United States than with the European Union because talks with the United States were more complicated.

The Sino-US textile consultation might be pegged to more issues, such as the renminbi exchange rate and the US trade deficit.

Interim measures for the administration of textile exports published last Sunday could also apply to exports to the US, as Chinese textile products are also curbed by the country, said Chong Quan, spokesperson with China's Ministry of Commerce.

"It (whether to apply these rules on exports to the US market) is determined by the results of the negotiations between the two countries," he said.

The new regulation, scheduled to take effect from July 20, aims to co-ordinate exports of Chinese textiles and to deal with the distribution of quotas among exporters.

A textile export company can apply for a corresponding export quantity according to a given formula, which takes into account the exports of the company both before and after the global removal of quotas on textile products.

But Chong said enterprises were likely to use up all quotas for this year given by the US Government for some of the seven textile categories in question before the new rules took effect, if current growth pace continues.

Statistics by US Customs suggest up to 47.1 per cent of the quotas for cotton trousers were used up by June 20 in less than a month after US safeguard measures were launched. As for the other categories, 2.2 to 46.2 per cent quotas have been used up.

Insiders expect the negotiations to rule out the possibility for new restrictions on other products.

The US Government decided to launch the emergency curbs last month.

Unless agreement is reached, US curbs will stay in place to the end of 2005 and limit growth in imports from China to less than 7.5 per cent this year.

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