China and U.S has signed a 3 year agreement to limit certain export of Chinese textiles and apparel to the US market. This has come to existence from 1st January 2006 as said by Mr. Mei Xinyu, a research fellow with the Chinese Ministry of Commerce. Further as per the deal, a total of 21 types of clothing and textiles products have been placed under the import restrictions, including cotton trousers. Clearing major obstacle in trade, deal offers a progressive increase in imports from China by 10 to15% in 2006 to15 to 17% in 2008. As per deal, imports from China are valued at $5 billion which could help US textile industry to cop up their economic stand in textile industry as they has lost nearly 400,000 jobs since 2001, in part due to fierce Chinese competition. Further due to the absence of a comprehensive deal, US had resorted temporary quotas, or so-called safeguards, which will now be replaced
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| by the limits set up under the new accord. After quota system expired last January, China's textiles exports gone up in 2005. Sino-U.S also covers some ten kinds of Chinese textile and apparel products exported to the European Union. The two textile agreements eliminate most uncertainties faced by Chinese clothing enterprises when exporting goods to two of the most important overseas markets. In terms of the textile export to the United States, 30% of the agreed quota in 2006 is distributed through public bidding, according to the regulation of the Ministry of Commerce. In December 2005, thousands of qualified textile enterprises in China joined the first bidding for export quotas on 21 categories of textiles to the United States in 2006. Chinese textile enterprises need to accelerate industrial upgrading and enhance self-innovation capability so as to meet the new challenges under new circumstances; Quota bid has increased cost of Chinese textile exporters. 
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