China and the United States are scheduled to hold talks on the steel trade next year, a senior US official said yesterday.

Franklin Lavin, the US under-secretary of commerce for international trade, said the talks will aim to head off potential trade disputes in the sector.

The planned meeting shows that the steel issue has become of great concern to both countries, analysts said.

The talks will be held by the Joint Commission on Commerce and Trade, a dialogue mechanism set up by the two countries.

Annual commission sessions cover hot topics between China and the United States, such as energy, telecommunications and textile issues.

"We've had a number of steel issues that have come up and so wouldn't it be better if we looked at these issues in a broader economic context and not simply wait 'till we've got to a trade dispute?" Lavin told media.

Many Chinese steel products, in particular low-cost products, are facing growing calls for trade barriers.

In August, the US launched a probe into two classes of China-made steel pipes.

More than 50 Chinese enterprises are involved, including 20 with an annual export volume of over US$1 million.

Lavin said formal trade disputes were not the best way to solve such problems.

Instead, he suggested bilateral negotiations, similar to those conducted over the textile trade.

It took the two sides nearly a year and eights rounds of formal talks to settle that dispute, which began over US concerns about skyrocketing imports of textiles and garments from China.

This occurred after the removal of the global quota regime in the textile trade at the beginning of this year.

The two sides agreed to impose quantity restrictions on Chinese textile exports for the next three years.

Lavin said he had put forward the idea of creating a mechanism for discussing steel when he met Chinese officials earlier this week. China has not yet commented.

The US also has similar steel dialogue with other trade partners, such as Canada.

Meanwhile, Lavin hopes China will increase its imports from the US in order to reduce the US trade deficit with the country.

The deficit hit US$100 billion in the first 11 months of this year, according to statistics from Chinese customs.

(China Daily December 23, 2005)