BEIJING: Chinese reaction to a textile trade deal signed with the United States ranged from relief to bitterness and uncertainty on Wednesday as Chinese exporters waited for details of the new quotas.
The deal that Chinese Commerce Minister Bo Xilai and U.S. Trade Representative Rob Portman sealed on Tuesday limits Chinese exports of 34 clothing and textile categories, such as shirts, trousers and underwear, for the next three years.
"The deal struck over Chinese-U.S. textile trade will create a stable, predictable environment for the trade, and greatly strengthen the confidence and determination of Chinese businesses and U.S. importers to accept and make orders," said the China Chamber of Commerce for Import and Export of Textiles in a written statement.
But even Bo and other Chinese officials voiced frustration at U.S. efforts to block rising Chinese textile exports after a global quota system expired at the start of this year. Immediately after signing the deal, Bo said the quotas were "a far cry from our original expectations".
The deal generally sets growth rates for clothing imports from China at 10 percent in 2006, 12.5 percent in 2007 and 15 percent in 2008. For textile products, the rates are 12.5 percent in 2006 and 2007 and 16 percent in 2008.
After that, U.S. rights to restrict such imports will shrink. The quotas are higher than the 7.5 annual growth allowed by current U.S. safeguard restrictions, and China's Ministry of Commerce and state-sponsored industry associations said the deal was the best Chinese manufacturers could expect.
A former Chinese trade negotiator, Zhou Shijian, told the Chinese-language China Business Daily: "China was in an innately unfavourable negotiating position" because of U.S. trade rules.
"REMOVES UNCERTAINTY": Many Chinese-based manufacturers said they welcomed an end to uncertainty but were waiting for the Ministry of Commerce to explain the quotas.
"The deal is good for us, because it removes uncertainty for buyers," said Zuo Quntao, a manager at the Weida Garments, a shirt maker in the eastern Chinese province of Zhejiang that exports nearly all its shirts.
But Zuo said that Weida and other exporters had not seen the details. "For real buyer confidence, we need to know the details of how quotas will be allocated," he said.
While some manufacturers welcomed the deal, other manufacturers said that if the quotas threatened growth, they may move some production to Southeast Asian countries, or use those countries for final processing so orders escape quota restrictions.
"We've mostly remained outside the limits. We've been using other countries in Southeast Asia to transfer shipments," said a sales manager at Aotin Enterprise, a clothes exporter in the far southern province Guangdong, who gave his surname as Luo.
The deal came after five months of grinding negotiations between China and the United States. Washington imposed quotas after U.S. manufacturers and trade unions complained that cheap Chinese clothes threatened their survival. Chinese textiles and clothes exports grew to $13 billion in the first months of this year, a rise of 65.5 percent on the same period last year.
In the deal, the United States said it would exercise "restraint" in using "safeguard" limits on Chinese textiles. But Fan Dabiao, the general manager of Soho International, a clothes exporter in eastern China, said he was worried about more restrictions. "The U.S. promised only to exercise restraint, so who knows what the variables may be in the future," he told the Chinese-language International Business Daily. reuters
