The Bush administration, struggling to deal with America's surging trade deficit with China, announced Thursday it would begin negotiations aimed at broad restrictions on imports of Chinese clothing and textiles.
Critics 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.
David Spooner, the administration's special textile negotiator, will lead the U.S. delegation, which also will include officials from the departments of Commerce, State, Labor and Treasury.
"Our aim next week is to seek a long-term solution," he said in a statement.
The administration has already re-imposed quotas on seven categories of Chinese clothing imports this year, limiting growth in those categories to 7.5 percent per year. Several more industry petitions are awaiting administration action.
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 percent and 12.5 percent a year until the end of 2007.
Lloyd Wood, a spokesman for the American Manufacturing Trade Action Coalition, said the textile industry wants a more restrictive deal than the EU agreement, saying levels of import growth "should be kept as close to 7.5 percent as possible."
Laura Jones, executive director of the United States Association of Importers of Textiles and Apparel, which represents U.S. retailers, said many of the categories where quotas have already been imposed have hit the limit for shipments this year as importers scrambled to get supplies into the country.
"Our people are looking for certainty and we are looking for larger growth rates that are more realistic," she said.
While America's trade deficit with China hit a record $162 billion last year, trade economists worry that Congress and the administration will erect protectionist barriers that will end up hurting consumers while producing few jobs.
Gary Hufbauer, a trade expert at the Institute for International Economics in Washington, said he estimated that a comprehensive agreement limiting a broad array of Chinese clothing imports could raise U.S. clothing prices by $6 billion annually, or about $20 for every American. Consumers have been benefiting from falling clothing prices over the past year, reflecting a big surge in cheaper-priced Chinese products.
Dan Ikenson, a trade expert at the Cato Institute, said he was concerned that the United States, by pursuing the textile negotiations, will lose the ability to achieve results in more economically important areas such as getting China to crack down on copyright piracy.
By Martin Crutsinger, Ap Economics Writer
