Chen liying/Shanghai Daily news

China and the United States reached a three-year deal yesterday, imposing quotas on Chinese textile exports but clearing a major obstacle to bilateral trade, the Ministry of Commerce said in Beijing.
The agreement was concluded in London by Chinese Commerce Minister Bo Xilai and US Trade Representative Rob Portman, after seven rounds of talks that lasted five months.
Both sides hailed the pact as a success.
"The deal dispels uncertainties over the frequent safeguards imposed by the US on Chinese imports in the past few months," the ministry said in a statement on its Website. "It brings to industries of both countries a stable and predictable trade environment."
Portman said, "I believe the textile agreement shows our ability to resolve tough trade disputes in a manner that benefits both countries."
The deal resolves a conflict caused by surging Chinese exports to America after a global quota system was lifted on January 1.
The agreement puts 21 categories of Chinese textile products under quantity controls starting on January 1 and lasting through the end of 2008, capping the annual growth rate at between 10 to 17 percent.
The products include cotton and manmade fiber trousers, cotton and manmade fiber knit shirts, underwear and bras.
The annual growth cap for 2006 is between 10 and 15 percent. The rate is 12.5 to 16 percent for 2007 and 15 to 17 percent for 2008.
The us also agreed to use a WTO safeguard provision in a restrained manner. The provision allows a country to limit imports at an annual growth rate of 7.5 percent if a massive influx disturbs its market.
China's exports of  textile products to the US jumped over 50 percent in the first eight months of this year. The US unilaterally imposed safeguards on 10 categories of Chinese textiles.
Shanghai textiles manufacturers contacted yesterday said they were happy about the deal.
"It gives us and our US clients confidence to start business for next year and onwards," said Jack Mao, of Shanghai Sales Clothing (Wei Xin) Co Ltd, which has received a new order for 500,000 pieces of cotton knitwear for next year. Although the allowed growth rates still don't meet our market demands, we are happy that the deal was finally signed."
Zhao xiaodong, an official with a knitwear export unit under the Orient International Group, one of Shanghai's biggest trading companies, said, "The deal will help the company land more orders for the fall and winter season and is very timely."