Don't tear the fabric of US-China trade

It is prudent that a compromise trade agreement be worked out between the United States and China in negotiations taking place in Peking later this week. At issue is the volume and range of textile products from China that should be allowed into the US. But beyond just that sensitive dispute is the larger matter of ensuring a continuing and mutually beneficial working relationship between the two nations.

The current three-year textiles agreement, reached back in 1979, expired last week. Under terms of that pact, China was allowed to expand textile exports to the US at a rate of 6 percent a year in several product categories. China would like a similar pact for future trade. But US textile producers, hit hard by the current recession, have persuaded the administration to limit the amount of Chinese clothing and textiles allowed into the US. China warns of retaliating against American exports.

With the Soviet Union now making overtures to Peking, this is hardly the time for the US to enter into a trade war with China. That does not mean that the US does not have some legitimate concerns in the present dispute. But it does suggest the need for as much flexibility as possible.

In the first ten months of last year China sold $751 million worth of textiles to the US. That is up from $590 million in 1981. But what must also be noted is that China purchased some $2.57 billion worth of goods from the US during that period - while selling the US almost $2 billion worth of products, including textiles. Thus, the US enjoyed a substantial trade surplus.

Complicating the current negotiations is the fact that the United States has already reached new agreements with Taiwan, Hong Kong, and South Korea to limit their textile exports to the US to less than a l percent annual increase over the previous year. Yet all three nations sell more textile products to the US than does China. Secondary shippers like China are traditionally allowed a much higher growth level.

Given the trade surplus enjoyed by the US, plus the long-run importance of Sino-American relations, it would be in the best interests of the US to produce a compromise agreement. A trade war between Washington and Peking is unthinkable.

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