BRUSSELS, Oct 12: The European Commission on Tuesday vowed to defend Europe's textile industry against foreign competition following the elimination of worldwide textile quotas in 2005.

EU trade chief Pascal Lamy said he was hammering out new measures to stop a much-feared surge in Chinese textile exports to the European Union. He also promised tougher action to prise open markets in China, India and the United States, saying textile tariffs in these countries were still too high.

"In the World Trade Organization we will continue to press for a reduction in tariffs and the elimination of non-tariff barriers," he said. Lamy also said he favoured the setting up of a special "reserve fund" to help textile-dependent EU regions deal with rising competition in textiles.

"Europe's textile industry is not being left to cope alone with the challenges," Lamy told reporters. The EU trade chief said the Commission was setting up a three-stage system for ensuring that Chinese textile exports did not flood European markets once textile quotas are removed in 2005.

Currently only subject to routine monitoring, Chinese textile trade with the 25-nation bloc would be more rigorously scrutinised as of January 1, 2005, the EU trade chief said.

A new scheme of progressively stricter "yellow, orange and red" alerts was being crafted to tighten the monitoring of Chinese exports and allow the use of safeguard measures if needed, he said.

"The Chinese know our concerns about the end of textile quotas," Lamy said, adding that he had discussed the new scheme with Chinese officials in recent weeks. The new system would work rapidly, with European company complaints about any change in Chinese trading patterns being addressed in a matter of weeks, he said.

"We have a competitive European textile industry and will fight to make sure it remains so in coming years," Lamy said. World Trade Organization (WTO) members agreed several years ago that the twenty-year old system of quota-based restrictions on textile exporting nations would come to an end in 2005.

But many textile exporting nations including India, Pakistan, Sri Lanka and Thailand now fear that world markets will be overrun by more competitive Chinese exporters. The United States, like the EU, has also warned that it will not allow Chinese textiles to flood its markets as of 2005.