American negotiators broke off textile talks in Peking yesterday without agreement virtually assuring unilateral U.S. action to curb Chinese imports. The action, however, is not expected to delay approval of a major U.S. China trade pact.
The quotas will be 100 percent, by categories, of textile shipments by the Chinese to the U.S. in the first 12 of the last 14 months, it was learned.
American negotiators claim the Chinese would have been given a larger quota if they had reached a bi-lateral agreement with the U.S.
The break-down of the Peking talks on textiles, American officials said, need not delay the more general trade pact with China that was initialled earlier this month in Canton by Commerce Secretary Juanita Kreps.
The United States had assured Congress that it would not forward the trade treaty for legislative approval-until limits were placed on Chinese textile exports to the United States. The trade treaty will give most favored nation tariff status to all Chinese exports, including textiles.
American officials proposed to the Chinese a system by which there would be an "Orderly Merketing Agreement" on textiles, similar to those with other textile exporters.This would establish two categories of restricted textile products.
For one, there would be automatic, specific volume limits. For the other, when exports touched an agreed-upon volume, the two countries would "consult" on the cut-off levels.
But the Chinese negotiators, over a several weeks time, vigorously opposed the specifics of the American proposal although they accepted in principle the idea of some limitation.
"They took the view," said one high American official, "that they are 'late bloomers' and that they ought to be allowed a generous base so as to earn some monet."
Privately, some American officials sympathize with this point of view, noting that in the short-term, textiles is one certain foreign-exchange earner for the Chinese.
Special Trade Representative Robert Strauss was not able to break down the firm Chinese objections in his talks in Peking this week. He pointed out that the U.S. could and would take unilateral action under Section 204 of the Agricultural Act of 1962.
Strauss argued that under the unilateral step, the Chinese would lose the benefitt of the increased export base of the past few months, because the formula calls for using only the first 12 of the last 14 months.
Moreover, the Chinese will lose flexibility, because unilaterally-set quotas will be in terms of the square yards volume of specific textile categories.Shifing from one to the other will not be permitted.
Nonetheless, the imposition of textile quotas by the U.S. doesn't necessarily impede the over-all trade treaty, but in fact, facilitates it, officials here say. There is always the possibility that the Chinese-which have only initialed the trade treaty - may delay signing it.
"But I dont't think it will happen," says an official in touch with the U.S. party in Peking. "I have a feeling this won't go down so hard. Rather than sign anything they objected to in principle, I think they are prepared to go along with this (unilateral action) for a while."