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Domestic textile exports to face quotas in Brazil

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The Chinese Government agreed to limit textile exports to Brazil, where the Brazilian Government says the products are threatening local industry.

The two countries signed an agreement Friday, the Brazilian Trade Ministry said.

The accord, signed in Beijing between Brazil’s Trade Secretary Ivan Ramalho and China’s Trade Vice Minister Gao Hucheng, will set quotas for eight types of Chinese textile exports to Brazil, according to the Brazilian Trade Ministry’s Web site. The products account for 60 percent of Brazil’s textile imports.

China controls more than a quarter of the world’s US$400 billion market for textiles and apparel, according to the American Manufacturing Trade Action Coalition. Chinese exports surged last year after the expiration of a global regime that limited trade in clothing and fabric.

China has reached accords with the European Union and the United States, while developing nations from Argentina to Turkey put in place caps on Chinese imports.

Under the agreement with Brazil, Chinese exports of silk, for example, can’t grow more than 9 percent in 2007 and more than 70 percent in 2008, the Brazilian Trade Ministry said.

“The agreement wasn’t ideal, but we considered it positive since it affected eight categories of products that have suffered a lot with Chinese imports in the past year,’’ said the Brazilian Association of Textile Makers in a statement.

Brazilian Chief of Staff Dilma Rousseff said in September the government planned to restrict Chinese textiles and shoes after a surge of imports threatened to force factory closures and job cuts.

Brazilian imports of textiles from China, the world’s fastest growing economy, rose fivefold in the past three years to US$149 million last year from US$28 million in 2002, according to Brazil’s Trade Ministry. Toymakers have also been hurt by rising textile imports, the Brazilian Government has said.

In the United States, despite the unilateral caps by the Bush administration and then the negotiated system of limits on Chinese products, imports from China were up 56 percent for the first 11 months of 2005 to US$21 billion, according to U.S. Commerce Department data.

The United States and China reached an agreement last Nov. 8 to limit exports of Chinese products through 2008 for 34 product categories including cotton pants, knit shirts and bras. The caps began Jan. 1 and range from 10 to 16 percent depending on the item.

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