The US and China are closer to a deal on restricting the latter's exports of clothing and textiles but require at least one more meeting to decide the final details, representatives of both sides have said.

US Trade Representative David Spooner said that the US had put forward a comprehensive strategy for limiting China's goods until 2008, while China is said to have offered its own proposal yesterday.

"We are close; both offers are in the ballpark," Spooner said during the second day of negotiations in San Francisco.

The Chinese Commerce Ministry said: "Because the two sides still have substantial differences in some matters of principle, they have agreed to continue discussions on this issue and jointly seek a way to resolve the issue".

According to Spooner, the next round of talks is expected to happen in China before the end of this month.

The latest set of discussions, which were approved by the World Trade Organization in the event of safeguard quotas being used, were hoped by some to set out specific starting points of future negotiation.

China's exports of clothing and textiles to the US have leapt 58 per cent since the WTO system of quotas expired in January this year, leading to protectionist action by the US and the EU, who fear that an influx of Chinese goods will severely damage their own industries.