China, US talks fail to find solution on textile quota row

BEIJING (AFP) - China and the United States have failed at a second round of talks to resolve a simmering row over US limits on Chinese clothing imports, China's commerce ministry said.

The technical-level talks were however "frank" and "pragmatic" and the two sides will decide on a next round though consultations, the ministry said in a statement.

"The two sides agreed to keep the channel of exchange open and continue the consultations to find out an appropriate way to solve the textile and garment issue," the ministry said.

The United States has placed restrictions on seven Chinese textile products after they rose dramatically following the ending of a global textile tariff system on January 1.

China and the EU headed off a trade war in early June when they agreed to limit the annual growth of 10 Chinese textile product exports to the EU to between 8.5 and 12.5 percent until the end of 2007.

Both sides hailed the agreement as a victory for free trade, with Beijing urging Washington to seek a similar pact and forgo unilateral moves that cap the growth of seven categories of imports at 7.5 percent annually until the end of this year.

Friday's talks were also to prepare for the annual meeting Monday of the Sino-US Joint Committee on Commerce and Trade.

US Secretary of Commerce Carlos Gutierrez, US Trade Representative Rob Portman and US Agriculture Secretary Mike Johanns will attend the meeting with Vice Premier Wu Yi and Trade Minister Bo Xilai.