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Paper: Hu may sign textile deal on US trip
(Reuters)
Updated: 2005-08-22 17:30

Chinese and U.S. negotiators aim to thrash out a deal over China's surging textile exports for President Hu Jintao and U.S. President George Bush to sign next month, an industry executive said in remarks published on Monday, the Reuters reported.

The Market Daily newspaper quoted Li Lingmin, vice-president of the China National Textiles Import and Export Corp., as saying talks would take place in Beijing before the end of August.

"Barring the unexpected, a final agreement is very likely to be signed in September during the meeting of the two leaders," said Li, whose firm is one of China's top 20 foreign trade companies.

Hu will travel to the United Nations next month and will hold talks with U.S. President George Bush.

A Commerce Ministry official confirmed that textile talks, the fourth round between the two sides, would take place in the Chinese capital but provided no further details.

Two days of meetings last week in San Francisco yielded progress but no breakthrough.

The United States imposed curbs on several categories of Chinese clothing after exports soared following the abolition on January 1 of a decades-old system of quotas on developing countries' textile exports.

Chinese exports of textiles to the United States leapt to $8.3 billion in the first six months, up 76 percent from a year earlier.

In invoking the safeguard curbs, which limit growth in the products affected to 7.5 percent a year, Washington was acting in accordance with terms that China agreed when it joined the World Trade Organisation in 2001.

The safeguards can be renewed until the end of 2008.

But Chinese exporters, U.S. textile manufacturers and American retailers that source billions of dollars worth of clothes from China are pressing for a comprehensive deal now so they can plan with confidence through 2008.

"Signing a deal is very important for manufacturers -- and the sooner, the better so exporters can adjust categories and quantities in line with the new rules," Li told the paper.

U.S. importers and retailers, who say the curbs raise prices and hurt consumers, want a pact allowing for growth of at least 20 to 25 percent.

Any deal would be similar to one that China struck with the European Union in June that restricts growth of 10 categories of clothing and textiles to between 8 and 12.5 percent a year through 2007.

That deal is now under fire from northern European retailers angry that goods ordered before the pact was reached have been impounded by European customs officials because the new quota ceilings have already been reached.



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