AmCham's hopes high for Sino-US trade agreement

PUBLISHED : Thursday, 13 January, 1994, 12:00am
UPDATED : Thursday, 13 January, 1994, 12:00am

THE American Chamber of Commerce (AmCham) is confident that the US and China will be able to settle their row over mainland textile exports in talks on Saturday.

AmCham president Frank Martin acknowledged that Washington was under pressure from the US apparel industry to get tough with China.

But he said: ''I don't think those political concerns will necessarily dominate the ultimate decisions if China takes steps to enforce existing laws to try to solve the problem of illegal transshipment.'' Mr Martin said there was evidence that illegal transshipment was a big problem and not a new one. ''It is difficult to catch this transshipment fraud,'' he said.

While US-China trade talks are often settled at the last moment, Mr Martin said: ''We have met hundreds of visiting congressmen in the past year who have emphasised the importance of not waiting for the 11th hour to reach a compromise.'' China's textile and garment agreement expired on December 31.

The US last Friday threatened to cut China's textiles quota by up to 35 per cent from January 17 if there was no new agreement.

Talks between the two sides broke down when China refused to accept stringent US demands for a plan to reduce transshipment - the export of products through third countries to evade US import quotas.

According to US officials, about US$2 billion in Chinese textiles and apparel products were transshipped to the US last year.

To deal with the problem, the US administration wants the Chinese to agree to a new bilateral textile accord giving the US the right to cut Chinese exports automatically if illegal transshipments are found.

Mr Martin also said the question of China's Most Favoured Nation trading status with the US was complicated by the attachment of human rights conditions to renewal.

He said that it was difficult to quantify progress on human rights or to say what kind of progress would be acceptable to the US congress.' ''At the same time, the US administration understands the economic importance of maintaining strong relationship with China,'' he said.

''Balancing the two issues would be difficult.''