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U.S., China to talk about quotas

The new quotas will impact Chinese knit fabrics, brassieres and dressing gowns.
The new quotas will impact Chinese knit fabrics, brassieres and dressing gowns.

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The U.S. plans to impose new import quotas on China to protect U.S. jobs and attack China's trade policies. CNN's Jamie FlorCruz reports.
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International Trade
Textiles and Clothing
United States

(CNN) -- The United States is attempting to hose down a growing trade row with China sparked by a decision to slap quotas on Chinese textiles.

U.S. trade officials are offering to talk to Beijing about the decision after China's Commerce Ministry responded quickly and angrily to the proposal.

A Commerce Ministry spokesman in Beijing said Thursday that China "definitely" would enter into talks with the United States to make clear its position.

The spokesman also said it was possible China would appeal to the World Trade Organization, or retaliate in some way, Reuters reported.

The Bush administration on Tuesday said it would impose import quotas on three types of Chinese clothing, in what is seen as a response to Chinese trade policies that Washington claims is costing U.S. jobs.

In an initial response to Washington's move, the Commerce Ministry in Beijing said Wednesday it firmly opposed the U.S. action and reserved the right to protect itself through the World Trade Organization, state-run media reported.

U.S. Commerce Secretary Don Evans said later Wednesday the quotas affected a "very, very tiny" portion of overall U.S.-China trade.

Speaking to reporters in Miami, Evans said the United States was willing to meet with Chinese officials "to see if there were other ways of dealing with the issue."

China's Commerce Ministry says it opposes and deeply regrets the U.S. decision.

China joined the WTO at the end of 2001 and promised to open up its domestic markets as part of that process.

But since then it has been under a barrage of criticism from the United States and Europe over the pace of its market liberalization moves and its trade policies in general.

Washington in particular has argued that China keeps its yuan currency artificially undervalued to give its exports a greater competitive edge.

The Bush administration has been coming under pressure at home over the perception that thousands of jobs are being lost by U.S. manufacturers to cheaper imports.

China runs massive trade surpluses runs with the West -- an expected $130 billion with the United States this year, up from $103 billion in 2002, and a $53 billion surplus with the 15-nation EU last year.

But some analysts point out that much of China's exports to the United States, Europe and Japan are produced in joint ventures operated by Western and Japanese companies in China.

The items covered by Tuesday's decision include dressing gowns, knitted fabrics and bras.

The American textile industry praised Washington's move but said this should merely be a first step in limiting imports of Chinese textiles.

An International Monetary Fund senior advisor for Asia-Pacific, Steven Dunaway, called the quotas "a big risk in the current environment" and one that could prompt Chinese retaliation.

Word of the quotas caused the dollar to sink against major currencies on fears of growing U.S. protectionism. (Dollar hits new low)

U.S. officials have made numerous trips to China this year, pressing for more open trade, Reuters reported. On Tuesday, Assistant Commerce Secretary William Lash, in Washington, said China had done a poor job of living up to its global trade promises, especially in the area of copyright and patent protections.

The new textile quota would put a cap on only 4.67 percent of total Chinese textile and apparel exports to the United States in dollar terms, according to U.S. industry figures.

"We are asking the Bush administration to broaden the scope of the negotiations (with China) to cover additional categories" of textile products, said Auggie Tantillo, Washington coordinator for the American Manufacturers Trade Action Committee, which sought the new quotas on behalf of U.S. firms.

Chinese gloves, hosiery, trousers and shirts are among the products the U.S. textile industry will seek further protection for, industry officials said. The industry claims to have lost 316,000 jobs in recent years.

But the U.S. National Retail Federation said the government's quota move would lead to higher consumer prices and could possibly disrupt supply, especially for bras.

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