Both China and the United States are treating formal consultations to reach agreement on the textile issue with caution.

"We expect the sides will make a reasonable deal similar to the memorandum of understanding signed between China and the European Union (EU) earlier this month," said Liang Shiyu, an official with the China Chamber of Commerce for Import and Export of Textiles.

But she said talks with the United States were more complicated compared with those with the EU.

"It (whether the two countries will reach an agreement) depends mainly on the attitude of the United States," said Mei Xinyu, a researcher with the Chinese Academy of International Trade and Economic Co-operation.

It depended on whether the US Government could understand the importance of this issue to China as well as whether the US could break through the bonds of its textile industry, he said.

Mei added that to find a solution to the increasingly tense textile friction as soon as possible would be the best thing for both sides.

Making a deal with the EU earlier this month has helped China take a favourable position in the talks with the United States.

US Commerce Secretary Carlos Gutierrez was quoted by Reuters as saying: "It's better to go into it (consultations) with an open mind and not make predictions about the outcome.

China and the United States opened consultations on Thursday.

Negotiations are expected to cover some technical topics in this area.

If this problem is not solved this month, it will become a major topic of the Sino-US Joint Commission on Commerce and Trade, said Cao Xinyu, chairman of the chamber of commerce.

Statistics from US Customs claim Chinese enterprises had used up, in less than one month, 8.3 to 31.2 per cent of the quotas for these seven categories given by the US Government for this year.

Experts predicted that the quotas might be used within two to three months.

"We hope the ongoing consultations will stop Chinese enterprises from being restricted in more categories," Liang said.

The US Government decided on May 13 to launch emergency curbs on three categories of textile products. Five days later, four categories of clothing imports were targeted.

Unless the two sides reach a deal, the US curbs will stay in place until the end of the year and will limit the growth in imports from China to less than 7.5 per cent for this year.

The EU, which had been preparing similar restrictions, reached a last minute agreement with China on June 11, allowing textile imports from China to grow at a rate of between 8 and 12.5 per cent.

Source: China Daily