China, EU meet for second day on textiles
(Reuters)
Updated: 2005-08-26 16:25

Chinese and European officials met for a second day on Friday to revise a two-month-old trade pact and decide the fate of millions of trousers, sweaters and other textiles from China languishing in EU ports, Reuters reported.

Chinese workers sew up garments on a production line at a factory in Wuhu, east China's Anhui province, August 25, 2005. China and the European Union began talks on Thursday to revise a two-month-old trade pact that has led to millions of trousers, sweaters and other textile products from China being blocked by EU customs officials. [Reuters/newsphoto]

The June deal, which capped growth in 10 lines of Chinese textile exports at 8-12 percent a year, was hailed at the time as a sensible response to a deluge of low-cost clothes from China following the scrapping of global textile quotas on Jan. 1.

But most of the new ceilings have already been reached, leading to vast quantities of garments such as bras and blouses being held up by EU customs.

European retailers are furious that they cannot take delivery of hundreds of millions of euros worth of goods that they bought for the holiday shopping season.

The new round of talks, which began in the Chinese capital on Thursday afternoon, resumed on Friday morning at the Commerce Ministry in Beijing, an EU spokesman said.

Negotiators are exploring solutions such as transferring quotas that have not been filled to more popular lines, "borrowing" from next year's quotas or allowing importers to bring in goods ordered before the June 10 curbs.

The EU spokesman in Beijing said European negotiators hoped the "constructive and friendly" atmosphere they described on Thursday would continue. China's Commerce Ministry has not commented on the talks.

Textiles have been a source of international trade friction this year following the Jan. 1 expiration of a long-standing global pact limiting textile trade.

Experts have long predicted that China, with its huge, modern factories and vast pool of cheap labor, would be the big winner from the textiles free-for-all.

The June deal allowed Beijing to avoid EU measures, permitted under world trade rules, to cap growth in China's textile exports to 7.5 percent a year until the end of 2008.

Beijing contends that its inexpensive products are a boon to European retailers and consumers.

Chinese negotiators will make the same argument next week when they sits down with U.S. negotiators in Beijing to try to thrash out a similar deal to replace the quotas Washington has imposed following a surge in textile imports from China.

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