Wednesday, August 31, 2005

China, U.S. fail to clinch textile deal


BEIJING (Reuters) - U.S. negotiators headed home on Thursday after failing to agree on China's surging textile shipments, a setback to efforts to showcase progress in bilateral ties when Chinese President     Hu Jintao heads to Washington next week.

Officials from the two sides met again briefly on Thursday morning after two days of haggling over a sweeping deal to cap imports of Chinese garments and textiles without having to invoke emergency curbs on a case-by-case basis.

Beijing and Washington had hoped that Hu and     President Bush could hold up an agreement as a positive development in ties strained over political issues such as Taiwan and economic issues such as China's swelling trade surplus.

Hu begins an official visit to the United States on September 5.

Natalie Hanson, of the U.S. Association of Importers of Textiles and Apparel, which opposes tough curbs on Chinese imports, said she was doubtful a deal could be struck this month.

"I think it's very clear that this is not going to be a quick thing to resolve. I think everyone does want an agreement. Both sides are in agreement on that," Hanson said.

"However, they are very far apart on the details and will need quite a bit more time to iron those things out."

U.S. and Chinese officials have met four times since May when Washington imposed emergency curbs, known as safeguards, to restrict a flood of Chinese imports triggered by the expiry of global textile quotas on January 1.

Negotiators had been eyeing a pact similar to one signed with the     European Union in June that capped growth in 10 categories of textile products at 8 to 12.5 percent a year, instead of the lower 7.5 percent cap allowed by     World Trade Organization rules.

On Wednesday the U.S. National Council of Textile Organizations, which supports restrictions on Chinese imports, said negotiators had not even narrowed their differences during the two days of talks.

China's textile exports to the United States nearly doubled to $7.4 billion in the first half of 2005, alarming textile-producing states.

The exports have also fueled concerns about Beijing's trade surplus with Washington, which hit a record $162 billion in 2004.

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