In testimony before the House Ways and Means Committee in February 2000, former US Trade Representative Charlene Barshefsky characterized the WTO deal struck between China and the United States as a ‘one-way’ flow of concessions from China to the United States. Although this argument suited efforts to persuade Congress to grant permanent normal trading relations (PNTR) to China, it is not strictly true. The United States – and the European Union, Canada and Norway – have in fact committed to important changes in their treatment of goods imported from China. In particular, they will eventually be required to eliminate quotas on imports of Chinese textiles and clothing. This concession is not trivial, with important political economy issues at stake in both the United States and the European Union.

The concession is also of considerable importance to China. Textiles and clothing make up approximately one-quarter of China's total exports by value, and around one-quarter of China's textiles and clothing exports go to the United States and European Union. This chapter examines China's interest in the deregulation of textiles trade as required by WTO provisions. It focuses on changes in the United States and European Union. As the regulatory barriers in these markets decrease, the benefits to China of its WTO membership will increase.