EU, China take a break in textile negotiations

EU left China yesterday after lengthy textile negotiations, as a spokesman insisted talks were continuing on what to do about above-quota Chinese garments piling up in European ports.

"What's happened now is the team from Brussels is returning to Brussels to report back," said Michael Jennings, an EU spokesman in Beijing, adding that they had departed. "The talks are still ongoing in Beijing, the contact is still ongoing, the discussion is still ongoing."

He said that while the entire delegation, headed by EU Trade Director Fritz-Harald Wenig, was going back to Europe, the dialogue was being carried on by the resident EU mission in Beijing.

"Our delegation, the delegation of the European Commission, is continuing the talks," he said.

Jennings he had no details on the results of the four-day negotiations but described them as "constructive."

China thought to be keen to wrap up the negotiations before a similar showdown with the US beginning today, and eager to seek a more or less lasting solution before an EU-China summit in Beijing next week.

EU Trade Commissioner Peter Mandelson on Sunday outlined a possible makeshift deal, saying that the EU could resume imports of textiles from China next month and allow blocked shipments into the 25 member states.

Some million garments, including sweaters, trousers, blouses, T-shirts, bras and tonnes of flax yarn, are being blocked at customs in European ports.

They are barred because they exceed an EU quota imposed in June to protect European manufacturers.

Chinese said they were optimistic since they were not facing a monolithic European bloc.

"The two sides will probably reach a compromise," said Liu Li, vice director of the China WTO Research Institute, a think tank attached to the Commerce Ministry. "Currently there are different voices among the EU countries, so the situation is good for China."

Two solutions appear to be on the table. The first, favored by Germany, the Netherlands and the Scandinavian countries, all traditionally free-traders, would consist of raising the permitted level of Chinese textile imports.

The second, more attractive to France, Italy, Poland and Spain, would allow China to use some of its 2006 quota to export blocked garments into the EU this year.