U.S. imposes quotas on Chinese textiles

Action is limited for now to bras, high-end fabrics


HONG KONG - The United States imposed quotas on imports of bras and certain expensive fabrics from China yesterday after American and Chinese trade negotiators failed to reach a deal in Beijing yesterday.

The Commerce Department softened the blow by postponing until Oct. 1 any decision on whether to impose special limits on imports of Chinese sweaters, robes, wool trousers and knit fabrics.

The department had set the deadline that expired Wednesday to set quotas on these categories, as well as bras and fabrics, to pressure China for a deal.

The collapse of the talks and the imposition of quotas make it highly unlikely the sides will be able to reach a deal before President Hu Jintao meets President Bush next Wednesday in Washington.

"Despite our best efforts, we were not able to reach a broader agreement," said David Spooner, the special textile negotiator in the office of the U.S. trade representative, but he said the American side hoped to hold further talks. "The United States remains optimistic that we can continue to make progress on the remaining issues."

China's Commerce Ministry issued a conciliatory statement last night.

"Both sides have been positively pursuing solutions to the textile issue and have demonstrated considerable flexibility in this round of negotiations," the statement said.

"However, as there still remain differences on matters of principles, no consensus has been reached in the talks. Both the U.S. and China agreed to maintain an open channel for negotiations and would determine the time and venue for the next round of talks through diplomatic means as soon as possible."

James C. Leonard III, the deputy assistant secretary of commerce for textiles and apparel, said in a statement that the imposition of restrictions "demonstrates the administration's commitment to leveling the playing field for U.S. industries by enforcing our trade agreements."

Willy Lin, vice chairman of the Hong Kong Textile Council and the managing director of Milo's Knitwear International, a company with garment factories in China, said the Commerce Department action would force Chinese bra factories in particular to lay off workers, especially as the European Union has already severely restricted Chinese bra shipments as well.

But Chinese bras have been subject to special limits for much of the past two years, and the manufacturers may have been expecting further limits, Lin said. "They already know the system, so let's hope the disruption will not be too great."

American limits on Chinese exports of certain costly synthetic fabrics may also not have a severe effect because China exports very little fabric to the United States, Lin said.

Low wages for seamstresses in China, who typically earn less than $2 an hour, mean that the cutting and sewing for garments is usually done in China for fabric produced in the country.

As part of the deal that created the World Trade Organization in 1993, trading nations agreed to dismantle at the end of 2004 the elaborate system of quotas that had regulated sales in garments and textiles for decades.

But when China joined the World Trade Organization in November 2001, China agreed that if its textile and apparel exports grew so rapidly that they disrupted overseas markets, then other member countries could re-impose quotas on these shipments through 2008. The re-imposed quotas would allow Chinese exports to rise only 7.5 percent a year.

Lin suggested that an American re-imposition of quotas on bra imports might cause shortages at Christmas, an important selling season for women's underwear in the United States.

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