Blog: Leonie BarrieChina textile deal in sight?

Leonie Barrie | 7 November 2005

It’s been a long drawn-out process, but at last it seems the US and Chinese governments are edging closer to an agreement to stem soaring textile imports into the USA. Although full details of the deal aren’t expected until tomorrow, according to the National Association of Textile Organisations it seems the basic structure of the three year bilateral textile pact with China is as follows.

1: Over the life of the agreement, Chinese growth rates will see only a minimal increase in market access – 3.8 per cent (in square metres) – over and above those imposed by safeguard clauses in the 14 largest and most sensitive textile and apparel categories. These categories include cotton and manmade fibre trousers, cotton and manmade fibre knit shirts, underwear and bras where Chinese export growth will be limited to 5.5 per cent in 2006, 7.8 per cent in 2007 and 10.3 per cent in 2008.

2: In addition, imports from China in 20 other priority textile and apparel categories will now be placed under quota control over the next three years. Here, growth would average 10-12 per cent in 2006, 12-15 per cent in 2007, and 16 per cent in 2008 

3: The US textile industry will retain full rights to use the safeguard in categories not covered by the agreement.

Protectionist US trade groups say such an outcome would meet the broad parameters that the industry set out when negotiations with China began. There have, in fact, been concessions from both sides if this is the agreement that is finally signed off. China originally sought a deal that would last until the end of 2007; whereas the US wanted to limit the growth of Chinese textile exports to 7.5% for the duration of the deal.

It will also come as a relief to many retailers and other importers for whom an agreement – any agreement – will provide some predictability and stability for buyers.

Let's just hope there are no nasty surprises.


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