US-China textile talks fail - US negotiator
(Reuters)
Updated: 2005-10-13 14:09

China and the United States have failed to find a formula to deal with China's booming textile exports, which have inflamed trade tensions between the two countries, the chief US negotiator said on Thursday.

"We have not come to an agreement that meets the needs of our domestic manufacturers and retailers," David Spooner, the special textile negotiator in the US Trade Representative's Office, said in a statement.

It was the fourth round of face-to-face meetings since a surge in Chinese exports unleashed by the end of global textile quotas on January 1 spread alarm in the United States.

China, with modern factories and cheap labor, has seen sales of clothes to the United States jump 75 percent in the first seven months to nearly $10.5 billion.

The two sides are aiming for a deal similar to a pact China and the European Union reached in June, and revised in September, that limits annual growth in 10 categories of Chinese textile exports to the 25-nation EU to between 8 and 12.5 percent a year in the period 2005-2007.

If China had not negotiated the caps, the EU would have been permitted under the terms of China's accession to the World Trade Organization in 2001 to impose unilateral growth limits of 7.5 percent a year until the end of 2008.

The United States has already invoked these "safeguard" provisions to curb imports of Chinese shirts, trousers, bras, underwear, yarn and other textile and clothing products.

Spooner said Washington reserved the right to resort to further restrictions to give its textile industry time to adjust.

"The US has been using its right under China's WTO accession agreement to invoke safeguards in cases of market disruption or the threat of market disruption, and we will continue to do so as appropriate," he said.

Spooner said Washington's aim was to reach "a longer-term solution that will permit greater stability in textile and apparel trade."

But a Chinese government researcher said in remarks published on Thursday said Washington was at fault for having turned textiles into a political issue.

"The US side has politicized the trade issue and largely neglected international practices, which makes it very difficult for people to expect any substantial results from the talks," Mei Xinyu from the Chinese Academy of International Trade and Economic Cooperation wrote in the Shanghai Securities News.

The two sides narrowed their differences in Washington last month and US industry officials had been confident before this week's talks that a deal could finally be struck.