The United States and China will begin talks here Jan. 22 on an agreement designed to prevent Chinese textile exports from flooding the American market, officials said yesterday.
An announcement from the Office of U.S. Special Trade Representative Robert S. Strauss said only that the purpose of the talks -- the first officals commercial contacts since formal diplomatic relations were resumed Jan. 1 -- is to "establish orderly growth for Chinese textile imports to this country."
But in this case, 'orderly growth" means a quota restriction designed to protect American manufacturers and workers from an excessive volume of low-cost imports. Similar arrangements, under a so-called MultiFiber Agreement, are in effect with most other textile exporters.
Michael Smith, chief negotiator for textiles in Strauss' office, said in a telephone interview that preliminary negotiations had begun last fall, well prior to the "normalization" agreement announced Dec. 15.
Smith said that the earlier talks -- at that time through the PRC's liaison office here -- indicated that the Chinese understood the concerns of American industry. Some six months ago, the PRC made a deal with Canada under which China agreed to restrain exports of specific categories of textiles to that country.
Some understanding along those lines will be sought in the talks here later this month, allowing for a steady growth in exports -- but establishing some upper limits.
When U.S.-PRC trade relations resumed in 1973 after former President Nixon's trip to China, Chinese textile exports began to increase, very slowly at the start. By 1976, total exports -- mostly cotton fabrics -- reached 153 million yards.
Shipments fell off in 1977 to 88 million yards, in part for internal political reasons and in part because of an earthquake in the textile-producing regions. But in the 12 months ending October 1978, exports not only had boomed to 190 million yards, but showed diversification into cotton products such as jeans, shirts, nightwear and blouses.
The American Textile Manufacturers Institute applauded the announcement of the talks, saying "our government must move quickly to establish controls on this trade." So far in 1978, PRC textile exports had amounted to $118 million, while U.S. textile exports to China were only $1.3 million, the ATMI said.
According to textile to textile experts, the quality of Chinese cotton fabrics -- which still dominate exports -- is high, equal to cloth produced anywhere in the world. Nearing 200 million yards, Chinese textile exports are already one-fifth the huge Hong Kong total, and sources here say that the potential is "enormous."
Smith will Iead the team of American negotiators, which will include representatives of the Treasury, Labor and State departments as well. The names of the chinese negotiators were not known here yesterday.
In a recent study on China's international trade published by the Joint Economic Committee, Richard E. Batsavage and John L. Davie noted that "higher levels of many traditional exports will run into barriers from protectionist actions, especially of sensitive products such as textiles and footwear, and from growth of competing industries in the Third World."
They noted that not only Canada, but Australia and Japan, had restricted exports of Chinese textiles, silk and footwear, and that the Common Market had insisted on a "safe guard" clause to prevent market disruption in a recent trade agreement with China.
In another article published by the JEC, Martha Avery and William Clarke suggested that the decline in Chinese textile exports between 1976 and 1977 may have been due to a unilateral PRC decision to reduce shipments to avert the imposition of quotas.
In a related development, Armco Inc. said that it would sell the PRC five offshore oil rigs worth about $30 million through its National Supply Co. subsidiary. One rig has been completed, and the other four are scheduled for delivery by the end of 1979.