United States and Hong Kong trade officials have commenced joint inspections of local textile factories in a move to resolve the long-running dispute over exports.
But hopes of a breakthrough are being weakened by fears that the US is attempting to apply additional pressure on the Government by clamping down on new categories of textiles.
Four teams of Hong Kong Customs and Excise Department officers and US Customs officials - each comprising four members - will be visiting up to 200 textile factories across the territory during the next 30 days. The visits will attempt to reject or confirm allegations that huge quantities of falsely labelled goods are evading quota restrictions.
However, the arrival of the US team coincided with the placing of four more categories of Hong Kong garments - cotton gloves, cotton-knit shirts, women's cotton trousers and cotton dressing gowns - being placed on a watch-list.
Trade officials have publicly described the action as disappointing but there is growing concern that it is a bid by the US to pressure the Government.
After a 30-day monitoring period, additional import restrictions could be imposed by the US if there is a probability of rule breaches. This coincides with the period US and local officials will be visiting factories across the territory.
The Hong Kong initiative for joint visits is an attempt to convince the US that stronger controls are unnecessary.