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US and Beijing Sign Agreement to Limit Chinese Textile Exports


U.S. and Chinese negotiators meeting in London have signed a three-year agreement to limit surging textile exports from China to the United States. The agreement ends a months-long trade dispute just as President Bush is about to visit to China.

Trade Representative Rob Portman and Chinese Commerce Minister Bo Xilai announced a deal had been reached to limit the export of more than 30 textile products from China. The deal is to last until the end of 2008.

The agreement, which comes a little more than a week before President Bush is scheduled to visit China, will allow for gradual increases above the limits the United States had unilaterally imposed on Chinese textile products.

Both sides described the agreement as a win-win situation, although Mr. Bo added the agreement was a "far cry" from Beijing's original expectations. He also indicated that the talks, which went through several unsuccessful rounds, almost broke down completely.

"On some of the negotiations, we were almost at the edge of the cliff," he said.

Mr. Portman said U.S. textile manufacturers, who have complained about job losses due to cheap Chinese imports, were pleased with the agreement.

"This provides for a three-year, predictable and certain environment, which will result in more, not less employment in the United States," he said. "I also believe it is a win-win, in the sense that it is also good for the Chinese employment picture, because they can also ... plan better."

Kui Wai Li is the Director of the Asia Pacific Economic Cooperation Study Center at the City University of Hong Kong. He says reaching the agreement before the Bush visit, and before the World Trade Organization session scheduled for Hong Kong in December, is political good timing as well.

"To have a bilateral agreement at this time on textiles may serve several functions," noted Mr. Li. "One is that that can get rid of the textile disagreement. And then, secondly, that will give the two parties more room, or more agreement, on other aspects of the WTO negotiation."

The Sino-U.S. deal lasts one-year longer than a similar agreement reached recently between China and the European Union.

China's already-large textile exports surged after global export quotas expired at the beginning of January.