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. Last Updated: 07/27/2016

China, U.S. Resolve Textile Trade Dispute

LONDON -- The U.S. and China signed a deal to resolve a trade dispute over imports of Chinese clothing and textile products into the United States, U.S. and Chinese officials said Tuesday.

The deal, announced by U.S. Trade Representative Rob Portman and Chinese Commerce Minister Bo Xilai, would take effect Jan. 1 and cover 34 clothing and textile categories, including 14 that the U.S. industry considered the most sensitive.

Portman said the agreement was fair to both countries, and called it an example of what "hard work" and "good faith" could accomplish. Bo, speaking through a translator, called it a "win-win" situation for China and the United States after three months of "practical and equal negotiations."

However, he also said the agreement would have a much greater impact on China's 20 million textile workers than the several hundred thousand workers in the United States. "I know that Mr. Portman has shown some flexibility at the end of the day, but I don't think that's enough," Bo said.

"That's still a far cry from our original expectations." The agreement would allow for imports of most clothing and textile categories covered by the deal to increase by 8 to 10 percent in 2006, by 12.5 percent in 2007 and by 15 to 16 percent for 2008. All of these percentages are above the 7.5 percent growth allowed under safeguard procedures the United States has been imposing.

The deal follows one China reached with the 25-nation European Union earlier this year and comes just over a week before U.S. President George W. Bush is due to visit China. U.S. textile and clothing companies and their labor unions were pushing for a comprehensive deal to stem a flood of Chinese imports that began last January when global quotas, in place for more than three decades, were lifted.

The Bush administration has been reimposing quotas, known as "safeguards," for individual categories of clothing and textiles. The industry wanted a comprehensive deal covering all threatened categories of U.S. production and lasting for three years. The safeguard quotas were only good for a year at a time. In a victory for U.S. manufacturers, the deal lasts through 2008 agreement.

U.S. textile industry officials have expressed support for the plan. U.S. retailers have said they would reluctantly go along with a comprehensive deal as long as the growth in imports was sufficient to let them obtain reliable supplies.

Portman and Bo were to travel to Geneva later Tuesday for talks at the World Trade Organization on a global trade deal.