US-China Signed 3-year Textile quota Agreement

China and the US have agreed on a tentative convention to solve differences on textile exports. The new agreement will allow U.S. importers and the Chinese government to manage quotas and avoid overshipments. 

The 34 types of products covered by a bilateral agreement announced on Nov. 8 include cotton knit shirts, man-made fiber knit shirts, woven shirts, cotton trousers, man-made fiber trousers, brassieres and underwear. 

The agreement would be applicable from January 2005 until 2008.  

The commitment would enable China to increase US exports by 10% during 2006, 13 in 2007 and 17 in 2008.

Under the agreement, which takes effect Jan 1, Chinese shipments next year would increase by 10% for apparel products and 12.5% for textiles.

In 2007, US imports would grow for all products by 12.5%, except for two categories -- fiberglass and thread -- in which shipments would increase by 15%. 

For 2008, US imports would grow 15% for a special category of eight products deemed sensitive by US producers, including cotton shirts and trousers, bras and underwear.  

Imports for four products -- thread, fiberglass, knit fabric and window blinds -- would be allowed to grow by 17%. All other categories would be limited to 16% growth. 

Under the agreement, the United States retains its authority to impose limits on imports of all textiles and apparel outside of the products covered by the pact. But in a nod toward China, the United States is promising to exercise restraint in the use of those limits.

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