EU to take textile talks to China

[Talon]

EU to take textile talks to China

European Trade Commissioner Peter Mandelson is heading for Shanghai on Friday amid rising temperatures in a trade row over textiles.

Mr Mandelson will talk to Bo Xilai, China's Commerce Minister, to seek an agreement to restrict Chinese exports.

The European Union fears that China's textile trade will overwhelm Europe's producers, following the lifting of quotas at the beginning of this year.

China says the EU and the US are acting unfairly by seeking to limit imports.

Mr Bo said on Thursday that China saw the textile row as a test of whether developed countries were serious about fairness in enforcing free trade rules.

"China will protect its industry's legitimate rights, and on the other hand will act in line with WTO regulations," he told reporters.

End of an agreement

The explosion in China's textile trade has followed the scrapping of the Multi Fibre Agreement on 31 December 2004.

Since then, both the EU and US have complained that textile exports have soared, in some cases fourfold.

Also on Thursday, shoes have also come under scrutiny after the EU said shoe imports from China had leapt 700% since the start of the year.

The EU wants China to agree to limit export growth to 7.5% on T-shirts and flax yarn - or face imposed quotas, perhaps within days.

An investigation into imports in seven other categories is still under way.

The EU position rests on China's agreement when it joined the World Trade Organization in 2001 to allow other members to curb its clothing exports if their markets were disrupted.

China says that Europe and the US need to provide better evidence before moving ahead with sanctions.

Mr Bo has warned that it may delay opening up its markets to agricultural products.

The US, meanwhile, held its own abortive talks in Beijing earlier this month.

Story from BBC NEWS:

http://news.bbc.co.uk/go/pr/fr/-/1/hi/business/4076394.stm