"We're still in the process of working through product coverage issues, growth rates," US Trade Representative Rob Portman told reporters, identifying two key components of the potential pact. "But we're getting closer. We're inching closer, but we're not there yet."
This week's meetings in Washington are the fifth round since a surge in Chinese exports unleashed by the end of global textile quotas on January 1 spread alarm in the United States.
Both sides met in Beijing in October, where the talks foundered on Beijing's demand that new quotas increase 20 percent in 2007 and 30 percent in 2008, according to US industry officials. They said Washington offered 12.5 percent growth in 2007 and 14 percent in 2008.
China, with modern factories and cheap labour, has seen clothing and textile shipments to the United States jump 54 percent in the first eight months to nearly $17.7 billion.
Under China's accession to the World Trade Organisation in 2001, Washington can impose "safeguards" until the end of 2008 if China's textiles are shown to be disrupting the US market. These cap growth in exports at 7.5 percent a year.
The United States has already imposed safeguard curbs on imports of Chinese shirts, trousers, bras, underwear, yarn and other textile and clothing products.
But to provide certainty for importers and domestic manufacturers, industry groups have pushed for a comprehensive deal similar to one negotiated by the European Union.
Portman told reporters he was not certain whether the two sides would reach an agreement this week.
"It's a tough negotiation," he said.
However, an agreement would give a boost to strained US-China trade relations before US President George Bush's visit to that country later this month.
Neena Moorjani, a spokeswoman for US Trade Representative's offices, said she did not know how long the talks would continue this week.
"Negotiators are working to resolve outstanding issues and we are optimistic that good progress can be made," she said.