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China, U.S. sign trade pact to limit clothing and textile imports
Washington: China and the United States have agreed to a three-year pact, which would limit Chinese clothing and textile imports. The deal will help a beleaguered U.S. industry but may result in higher average annual clothing bills for the American family by US$10-20.

Even with resolution of the textile fight, many trade issues remain, from theft of U.S. computer programs to Chinese manipulation of its currency. And with the trade deficit with China expected to approach a record $200 billion this year, the Bush administration will be under pressure to do more.

The textile agreement was announced by U.S. trade representative Rob Portman and Chinese commerce minister Bo Xilai after a final round of talks in London.

Bo called it a "win-win" for both countries while Portman described it as a "very good agreement for the American worker." The agreement comes just 11 days before President Bush is scheduled to arrive in China for an official visit.

The deal will impose annual growth limits on 34 categories of clothing and textile imports through 2008 with the products deemed the most sensitive by American producers - trousers, shirts and underwear - subject to the smallest increases.Analysts estimate that the restrictions will drive up clothing prices by between US$3-6bn annually.

The administration was under heavy pressure to reach a deal from American clothing and textile manufacturers, who have lost 398,600 jobs - one-fourth of their work force - in the past five years. Clothing imports from China have risen by 46 percent this year by volume since global quotas expired on Jan. 1.

To protect American workers, the administration had been re-imposing quotas under a "safeguard" process that limited growth to 7.5 percent a year. However, the industry had to petition for this relief on a category-by-category basis and it had to be renewed each year.

The average annual increases for clothing under the new agreement are 10 per cent in 2006, 12.5 per cent in 2007 and 15 per cent to 16 per cent in 2008. But because the agreement starts at a lower base, industry officials estimated it would amount to only 4 percent larger shipments at the end of 2008 than under the safeguard process.
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Bank of New York to pay US$38mn to settle criminal investigations
New York: Bank of New York Co. has agreed to pay US$38mn and settle two criminal investigations, linked to US$7bn in suspicious transactions from Russia. These transactions were linked to money laundering.

Bank of New York (BNY) reached an agreement that enables it to avoid indictment if it continues cooperating with the government and appoints an independent examiner to monitor its practices for three years. The company will pay US$12mn to compensate other banks for losses arising from the criminal conduct of former employees and will forfeit US$26mn.

``This agreement closes the book on BNY's role in an underground Russian money transfer system that moved US$7bn through BNY's accounts,'' Manhattan U.S. Attorney Michael Garcia said in a statement.

The pact announced by Garcia and U.S. Attorney Roslynn Mauskopf in Brooklyn, New York, follows a 2000 accord in which the bank agreed to improve its oversight and reporting of suspicious transactions. Prosecutors said today the bank ignored that accord and engaged in a separate fraud at a suburban Island Park, New York, branch.

The Manhattan investigation, launched in 1998, stemmed from allegations that Lucy Edwards, a former London-based vice- president for Bank of New York, and her husband Peter Berlin, who operated companies with accounts at the bank, conspired to launder more than US$7bn from Russia. Edwards and Berlin pleaded guilty in February 2000.

Edwards admitted she helped set up three accounts at the Bank of New York at the behest of `Russian bankers who had obtained control'' over two Russian banks. The accounts were used to transfer billions of dollars out of Russia without paying taxes or duties to the Russian government, she said.
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