SHANGHAI, June 10: The European Union and China agreed on Friday to curb a surge in imports of Chinese textiles into Europe until the end of 2008, in a bid to defuse an escalating row straining ties between the EU and Beijing.
EU trade chief Peter Mandelson welcomed the accord, struck during talks with Chinese Commerce Minister Bo Xilai in Shanghai.
“It’s an agreement, therefore that helps everyone’s interests,” he told a news conference here.
“It’s a win-win-win agreement,” he added.
The European Commission, the EU’s executive arm, added in a statement: “The EU and China have agreed a deal that will manage the growth of Chinese textile imports to the EU until the end of 2008.”
The accord aims to defuse a growing trade dispute triggered by the end of global textile quotas on January 1 which opened the floodgates to a surge of cheap Chinese goods into Europe.
China had until the end of Friday to agree to curb growth in exports to the European Union of T-shirts and flax yarn to 7.5 per cent a year or face temporary caps on the products.
“The overall settlement represents a fair deal for China while giving respite and a much-needed breathing space for European industry,” added Mandelson.
The EU had requested formal talks at the World Trade Organization (WTO) with China on the issue, citing a huge jump in exports of Chinese T-shirts and flax yarn following the end of the textile quota system.
Under the rules on China’s WTO accession in 2001, a request for talks enables Beijing’s trading partners to place a temporary cap on textile imports if China does not first take its own voluntary measures within 15 days.
Washington has already set limits on seven types of Chinese textile shipments. That dispute has also been fuelled by concerns in the US that China’s currency is undervalued, giving it an unfair advantage on the global market.
Although the European Commission had taken action only against T-shirts and flax yarn, it was seeking a blanket agreement covering other categories of textiles still being investigated.
Prior to the agreement, the textile row had risked escalating after the EU commission said on Wednesday it had found evidence of a 700 per cent jump in imports of six types of Chinese-made shoes in the first four months of the year compared to the same period in 2004.
But Mandelson said that the deal struck on Friday was good for trade relations with the growing Asian economic giant.
“I think this all goes very well for future relations”, he said.
