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THE NEW YORK TIMES <P>PARIS <P> - The Tech

U.S. Presses China on Textile Quotas As Visit by Chinese President Nears<P>By Thomas Fuller
and Chris Buckley THE NEW YORK TIMES <P>PARIS <P>

U.S. Presses China on Textile Quotas As Visit by Chinese President Nears

By Thomas Fuller
and Chris Buckley
THE NEW YORK TIMES


PARIS

China remained entangled in trade disputes with the world’s two biggest economic superpowers Tuesday, as the United States pressed Beijing to reduce the flow of cheap textiles while Europe sought to pick up the pieces of its failed quota deal.

The arrival of American negotiators in Beijing, after the departure of a European Union delegation on Monday, underscored the pressures China faces in restricting its textile exports enough to quell protectionist sentiment in the United States and Europe.

The latest round of talks between the United States and China comes as Washington is to decide Wednesday on six more “safeguard” restrictions that would cap Chinese exports. China is also under pressure to conclude a deal with Washington before President Hu Jintao’s visit to the White House on Sept. 7.

So far, Beijing and Washington appear to be divided over how much export growth to allow in any settlement. With the prospects of a breakthrough uncertain, the trade dispute could shadow Hu’s visit to Washington.

Chinese trade officials and industry representatives said they were hoping for a compromise. “The chances of this fourth round of consultations achieving substantial progress, and even signing an agreement, are rising,” He Weiwen, a senior adviser to the Chinese Commerce Ministry, told The International Business Daily, a Chinese-language newspaper.

Meanwhile in Brussels, Peter Mandelson, Europe’s trade chief, warned Tuesday that the union’s agreement with China to limit textile exports for the next two years could collapse if European governments did not agree to accept the sweaters, bras, trousers and T-shirts now marooned in European ports.

“I am not confident the Shanghai textile agreement will be sustainable unless we release the goods currently held at the border,” he said of the June quota deal, without elaborating.

The number of garments stranded at ports grew to 84.4 million items on Tuesday, up from 80 million on Monday. Europe’s retailers placed large orders for Chinese clothing ahead of the quota agreement, swiftly hitting the quota’s limits.

Addressing the European Parliament’s trade panel, Mandelson’s tone was markedly different from Monday, when he said the notion of clothing shortages was exaggerated. On Tuesday, he said that not letting the garments into Europe would cause “severe economic pain for many smaller retailers and medium-sized businesses” unable to find alternate suppliers at short notice.

“It could mean some shortages during the autumn but, even more likely, higher consumer prices for many of our citizens who cannot afford to pay more for clothes,” he said.

Retailers from across Europe, notably in Britain, Sweden, Denmark and Germany, have warned that the blocked goods could hurt their bottom lines.