US-China Settle on Broad Textile Agreement
Agreement provides manufacturers and textile producers with more stability and predictability in textile trade.
Compiled by staff
Published: Nov 8, 2005
After five months and seven rounds of negotiations, Tuesday China and the United States finally completed a broad agreement on textile trade. The Agreement lasts through the life of the China WTO Textile Safeguard, through 2008, covers more than 30 individual products and contains quotas that begin at low levels.
"The U.S. goals in this agreement have been clear from the start. We sought an agreement that achieves the stability and predictability sought by our retailers but also by our textile producers, who understandably found it hard to plan in the face of unpredictable safeguards," U.S. Trade Representative Rob Portman says. "Five times we walked away from a deal that didn't meet this objective."
Chinese Minister of Commerce Bo Xilai says, "It is because of the flexibilities shown by the U.S. side in the sixth and seventh rounds of negotiations that we finally succeeded in concluding the agreement."
The Agreement goes into effect on January 1, 2006 and ends on December 31, 2008. It places quotas on a broader array of products (34) than are currently subject to China safeguards (19).
The quotas established under the Agreement compare favorably to quotas that would have been imposed if China textile safeguards were invoked. In 2006, the Agreement imposes tighter limits on Chinese exports of "core" apparel products than any quotas that could have been imposed under the China safeguard in 2006.
In general, quotas established by the Agreement for 2006 on "core" products are lower than the safeguard threshold, about the same as the safeguard threshold for 2007, and higher than the safeguard threshold for 2008. Over the life of the Agreement, China can export 3.2% more of the covered products to the United States than if the safeguards were invoked on all of the covered products for all three years.
The Agreement's broad product coverage and three-year lifespan will allow all private sector stakeholders to plan in a more stable and predictable environment, including African producers and exporters.
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