The recent US-mainland agreement on textile trade hasn't created a "substantial impact" on Hong Kong manufacturers.

Textile & Apparel Committee Chairman of the American Chamber of Commerce in Hong Kong Peter Liu said this at a luncheon hosted by Hong Kong General Chamber of Commerce yesterday.

"Since many Hong Kong textile manufacturers have relocated their (mainland) production lines overseas, the garment agreement reached between the mainland and the US last month did not have a substantial impact to them," he said.

"A number of local producers have been setting up plants in other countries and regions too... Orders from US buyers have so far remained unchanged for local manufacturers."

The November 8 agreement places an annual cap of US$5 billion on 34 types of apparels and textiles from the mainland.

Moreover, US importers have begun placing orders with local players for next year. That reflects their continued confidence of doing business with Hong Kong producers, Liu said.

The current relocation will not add too much to local producers' costs because as "manufacturers will choose to relocate only part of their production".

The agreement, Liu said, will be good for the mainland and the US both, for it provides a timeframe for the increase in most major textiles' and apparels' imports from the mainland.

The increase will be in phases; by 10 to 15 per cent in 2006, 12.5 to 16 per cent in 2007 and 15 to 17 per cent in 2008.

"US importers will benefit because it will help them better plan their business over the next three years," Liu said. Also, it will help boost the mainland's textile exports instead of having a trade war with the US.

Liu hoped, too, that the agreement would help improve the quality of many of the inferior products that are exported from the mainland.