BEIJING (Reuters) - China and the United States failed on Thursday to find a formula to regulate China''s booming textile shipments, immediately prompting American manufacturers to seek curbs on imports of towels made in China.

With time running out for an agreement before the end of the year, the stalemate means U.S. retailers will face uncertainty about just how much they will be able to import from China until the end of 2008, when curbs on its textile exports will lapse.

"We have not come to an agreement that meets the needs of our domestic manufacturers and retailers," David Spooner, the special textile negotiator in the U.S. Trade Representative''s Office, said in a statement after two days of talks.

It was the fourth round of face-to-face meetings since a surge in Chinese exports unleashed by the end of global textile quotas on January 1 spread alarm in the United States.

A spokesman for China''s Foreign Ministry, Kong Quan, said some friction was inevitable given fast-growing trade between the two countries.

"What is important is that China and the U.S. can take a calm, objective and forward-looking attitude to deal with and resolve their problems," he told a regular news briefing.

China, with modern factories and cheap labor, has seen sales of clothes to the United States jump 75 percent in the first seven months to nearly $10.5 billion.

Under China''s accession to the World Trade Organization in 2001, Washington can impose "safeguards" until the end of 2008 if China''s textiles are shown to be disrupting the U.S. market. These cap growth in exports at 7.5 percent a year.

NO PROGRESS

The United States has already imposed safeguard curbs on imports of Chinese shirts, trousers, bras, underwear, yarn and other textile and clothing products.

At the same time, in order to provide certainty for importers and domestic manufacturers, industry groups have been pushing for a comprehensive deal similar to one negotiated by the     European Union.

That agreement, reached in June and revised in September, limits annual growth in 10 categories of Chinese textile exports to the 25-nation EU to between 8 and 12.5 percent a year in the period 2005-2007.

"At this round, China returned to its position of delay and no compromise by insisting on terms for an agreement that were impossible for the U.S. government to accept and that would have been extremely damaging to the U.S. industry and its workers," Cass Johnson, president of the National Council of Textile Organizations, said in a statement.

As a result, Johnson said the textile industry had filed a petition with the U.S. government requesting safeguard curbs on imports of towels from China, which he said rose 224 percent in the first eight months of the year.

The two sides narrowed their differences in Washington last month and U.S. industry officials had been confident before this week''s talks that a deal could finally be struck. U.S. Trade Representative Rob Portman (news, bio, voting record) had been ready to come to Beijing to close a deal, industry executives and diplomats said.

In the event, U.S. lobbyists said, Beijing dug in its heels and demanded far higher growth ceilings than the United States could accept.

"Our understanding is that there was absolutely no progress," Auggie Tantillo, executive director of the American Manufacturing Trade Action Committee, told Reuters. "A mutual agreement does not appear to be on the cards in the near future."

He said the textile industry would now file petitions for fresh protection and seek to ensure that existing safeguards were rolled over seamlessly when they lapsed at the end of the year.

"It is the importing community which must be completely out of sorts, not knowing what the arrangements will be for 2006 and what its sourcing options will be," Tantillo said.

Spooner, who was flying back to Washington on Thursday, said the United States would continue to impose safeguards "as appropriate."

Reuters