China and the United States started talks on a comprehensive textile trade agreement in San Francisco yesterday.

The two-day talks are expected to centre on the seven categories on which the US imposed quotas in late May this year, according to information published by the US Trade Representative Office.

Female workers work at a textile factory in Dongguan, South China's Guangdong Province in this picture taken on August 1, 2005. [newsphoto]

Chinese textile enterprises are expecting an agreement over the issue to remove the largest uncertainty in trade with the US. But experts said the outcome could be limited because of the level of the talks.

The Ministry of Commerce said last week that the ongoing round of talks was still technical. The two sides failed to reach an agreement at the two previous rounds of talks in June and July.

But the meeting could help reach consensus on some specifics if not on a comprehensive deal, said Zhao Yumin, an expert with the Chinese Academy of International Trade and Economic Co-operation, a think tank of the ministry.

So far, around 20 categories of Chinese textile and apparel products are covered by the US curbs and investigations.

However, some US textile importers and retailers have criticized Washington for imposing limits on Chinese textile products.

US experts say America's annual clothing bill could rise US$6 billion - or US$20 for each US consumer - if China agrees to restrain textile exports.

Since a three-decade system of clothing and textile quotas expired January 1, there has been an increase in clothing and textile imports entering the US from China. Shipments are up 58 per cent so far this year, a rise that has played a big part in pushing the cost of clothing down at an annual rate of 5.9 per cent for the three months ending in June.

In another development, some European Union (EU) countries, including Germany, Sweden, Denmark and the Netherlands, are pressing the European Commission to relax its quotas on China's textile and apparel products.

In June the EU negotiated a comprehensive arrangement with China that covered 10 categories and allowed growth in shipments of 8.5 per cent to 12.5 per cent annually through 2007. But Chinese textile exporters have already reached the EU ceiling in sweaters and trousers, and used more than 80 per cent of the quotas on T-shirts, blouses and bras.

Editor: Yan