The European Union (EU) has agreed with China to end quota restrictions on Chinese textile imports with a joint surveillance system to monitor the trade flow in 2008, the European Commission said on Tuesday.

The "double checking system" will track the issuing of licenses for export in China and the importation of goods into the EU, the commission said in a statement.

It will operate for one year in 2008 following the end of quota restrictions on Chinese textiles and clothing, the statement said.

Following a so-called "textile war," the EU and China reached an agreement in June 2005 on resuming quotas on China's textile exports to the EU, which expires at the end of 2007.

Although imports of these goods will be closely monitored, their level of import will not be restricted by this arrangement, the EU's executive arm said.

"I welcome this further step in the cooperation between the EU and China in ensuring a smooth transition to free trade in textiles," said EU Trade Commissioner Peter Mandelson.

Mandelson said a system of joint monitoring means predictability for EU producers and traders as well as a clear picture of future developments as the EU makes the final step to free global trade in textiles and clothing.

According to the commission, the joint surveillance system will cover eight categories of textiles and clothing from China, namely T-shirts, pullovers, men's trousers, blouses, dresses, bras, bed linen and flax yarn.

The system will be formally adopted by the commission in the coming days. On the EU side, national licensing offices will be in charge of the monitoring.