U.S. to Seek Curb on China Textiles

The Bush administration, struggling to deal with America’s surging trade deficit with China, announced Thursday that it would begin negotiations aimed at broad restrictions on imports of Chinese clothing and textiles.

The news came as Beijing reported that China’s cumulative trade surplus for the year rose to $50 billion in July, far exceeding the $32-billion surplus for all of 2004, as tighter credit and spending policies bit into the growth in imports.

Economists say it is too early for the effect of China’s July 21 revaluation of the yuan -- raising its value by about 2% against the dollar -- to show up in trade figures. But China’s persisting strong trade surplus could fuel calls from the U.S. and other trading partners for further currency adjustments.

However, critics of further restrictions on Chinese textiles said such new limits could cost American consumers billions of dollars in higher clothing costs. Supporters said a comprehensive deal imposing limits on Chinese imports was needed to protect a U.S. textile and apparel industry that has been left reeling with the expiration of global quotas at the start of this year.

Several Republican lawmakers from textile states have demanded that the administration agree to begin talks with China in return for their support for the just-passed Central American Free Trade Agreement, which squeaked through the House by a slim two-vote margin.

One of those lawmakers, Rep. Robin Hayes (R-N.C.) praised the administration’s decision. He said he changed from opposing the free trade deal with six Latin American countries to supporting it because of commitments the administration had made to provide relief to the U.S. textile industry.

“Not until the administration said it would work with the industry on the issue of exploding imports from China was I able to support [CAFTA],” he said in a statement.

The office of U.S. Trade Representative Rob Portman announced that a U.S. negotiating team would travel to San Francisco for talks next Tuesday and Wednesday with a delegation from China. The administration gave no indication how long the talks might last, but industry officials speculated that the effort may be aimed at achieving a deal that could be announced when Chinese President Hu Jintao visits Washington in September.

The administration has already reimposed quotas on seven categories of Chinese clothing imports this year, limiting growth in those categories to 7.5% per year.

However, a comprehensive deal could cover more categories of clothing and could potentially be achieved more quickly than the process needed to review individual industry petitions.

The European Union in June reached its own comprehensive deal with China that limited the growth in 10 Chinese textile and clothing categories to between 8.5% and 12.5% a year until the end of 2007.