U.S. and China Sign Textile Agreement

The United States and China signed a broad agreement on Chinese textile imports into the United States that goes into effect on January 1, 2006 and ends on December 31, 2008.

Published: February 27, 2002
Updated: November 9, 2005

On Tuesday, November 8, the U.S. and China signed a broad agreement on Chinese textile imports into the U.S.

The agreement goes into effect on January 1, 2006 and ends on December 31, 2008 and places quotas on a broader range of textile and apparel products (34) than are currently subject to China safeguards (19).

The quotas established under the agreement compare favorably to quotas that would have been imposed if China textile safeguards were invoked. Over the life of the agreement, China can export 3.2% more of the covered products to the U.S. than if the safeguards were invoked on all of the covered products for all three years. In general, U.S. imports of Chinese goods covered by the agreement are allowed to grow by 10 to 12.5 percent in 2006, 12.5% in 2007, and 15 to 16 percent in 2008, depending on the item imported. 

Furthermore, in 2006, the agreement imposes tighter limits on U.S. imports from China of “core” apparel products.  The “core” apparel products are cotton knit shirts, MMF knit shirts, woven shirts, cotton trousers, MMF trousers, brassieres, and underwear. Other items covered by the agreement include combed cotton yarn, cotton towels, glass fiber fabric, knit fabric, polyester filament fabric, special purpose fabric, synthetic filament fabric and thread, sweaters, socks/baby socks, swimwear, and blinds.

As part of the agreement, the U.S. promised to exercise restraint in the future use of safeguards on products that are not covered by the agreement. The agreement also contains mechanisms to allow U.S. importers and the Chinese government to manage quotas to avoid overshipments. For example, China will manage its exports with a visa system and can borrow small amounts of quota from future years to cover overshipments.