Textile crisis team from EU to hold talks with Beijing

A textile-crisis team from the EU is due to hold talks in Beijing tomorrow to negotiate a solution to blocked imports of Chinese textiles, after another three clothing categories breached quotas, officials said yesterday.

"On Aug. 25 our foreign-trade department head will talk with an EU textile delegation," an official from the Ministry of Commerce said.

Meanwhile, a fourth round of Sino-US talks on textiles is slated to take place in the Chinese capital early next week, ahead of President Hu Jintao's (胡錦濤) visit to Washington in September, officials from the Ministry of Commerce Industry said. A date had yet to be set.

The EU delegation will hold talks on the re-implementation of textiles quotas as shipments of shirts, bras and flax yarn have now begun piling up at customs points across the EU.

Negotiations focus on unravelling the logjam of imports in Europe on three categories of Chinese-exported garments which on Monday exceeded the import limits agreed between Brussels and Beijing.

A total of six out of 10 categories covered by the textiles agreement have now surpassed their allotment including limits on blouses, men's trousers and pullovers.

The EU averted a near trade war with the Asian giant in June when both sides decided to temporarily restrict the onslaught of inexpensive Chinese imports flooding the 25-nation block.

The move was meant to help EU producers facing a flood of cheap imports, but now appeared to be causing more damage than good.

"The agreement of the quota by the two sides was a political compromise to maintain the strategic partnership, but it hurt the economic and trade relations of the two," said Sun Haibin, spokesman of the China National Textile Industry Council.

With millions of garments stuck in EU customs and European supply chains, some countries and European retailers insist that the commission must review the deal.

"The EU did not foresee that countries such as France, Spain, Italy and others has built up a huge supply of orders," said Dean Spinanger, a textile trade expert at the Kiel Institute for World Economics in Germany.

Hardest by the fresh stalemate were major retailers, such as the Swedish group HandM or large distributors such as Carrefour of France.

"The product sitting in the ports could maybe sold elsewhere, but losses are likely to be huge," Spinanger said.

Neither did the EU wholly consider that many EU textile companies started to shift production to China last year, analysts said.

"Many of them started to order more from Chinese companies beginning from last year, because they knew the quota was going to be removed, which the EU did not completely think through when it imposed the quotas," said Mei Xinyu, a trade analyst at the Ministry of Commerce.

Similarly, Sino-US negotiators hope to hammer out an agreement on Chinese textile garments after talks in San Francisco failed to yield a deal to regulate rocketing volumes of Chinese textile shipments.