At Last! US, China Sign Bilateral Textile Agreement
Officials say pact gives stability, predictability to retailers, producers
LONDON, England - 11/10/05 - The US and China have signed a comprehensive bilateral textile agreement that officials say will ensure "stability and predictability" for American retailers and producers.
The agreement, signed Tuesday after months of intensive negotiations, covers more than 30 individual products and contains quotas that will begin at low levels in January 2006, but will increase gradually by about 3% each year over a period of three years.
In remarks to the press at the signing ceremony in the British capital, US Trade Representative Rob Portman said the textile agreement "will last through the life of the China World Trade Organization (WTO) Textile Safeguard" and will cover 46% of previously regulated China textile exports to the US.
The China WTO Safeguard is scheduled to run through 2008.
The US has imposed safeguards, or temporary quota extensions, on 19 of the 34 products covered.
"The US goals in this agreement have been clear from the start," said Portman. "We sought an agreement that achieves the stability and predictability sought by our retailers but also by our textile producers."
Commerce Secretary Carlos Gutierrez, in a statement released after the agreement was signed, applauded the pact, saying it "demonstrates our commitment to working within the WTO process to resolve differences with our trading partners."
Gutierrez also said the agreement "highlights the value we place on aggressively enforcing our trade agreements to provide a fairer and more certain trading environment for American businesses and American workers."
Portman said that in addition to providing a three-year predictable textile trade environment, the agreement would ensure more employment for workers in both the US and China.
"I am hopeful that in the future in treating similar disputes we can do so in a principal of being rational and calm and wise and also equal to each other," said Chinese Minister of Commerce Bo Xilai.
The textile issue "was a very complicated matter involving both economic issues, social issues and also legal issues and also it's under the attention of the media," he said.
"We don't expect that this single achievement can help us to solve all the conflicts or problems between us, but we don't want to see such a small trade obstacle to impede the overall trade and economic cooperation between the two countries."
According to the most recent figures, China's textile industry directly employs 1.9 million people.
That compares with 662,700 US textile industry workers as of May - 225,100 employed by textile mills, 178,400 by textile product mills and 259,200 by apparel-producing factories, according to the September issue of the Monthly Labor Review published by the Department of Labor's Bureau of Labor Statistics.
The textile agreement will take effect January 1, 2006, which will allow importers and exporters a two-month period to prepare.
According to a USTR fact sheet, the agreement contains mechanisms to allow US importers and the government of China to manage quotas and avoid over-shipments.
For example, China will manage its exports with a visa system and can borrow small amounts of quota from future years to cover over-shipments.
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