EU-China Textile Import Talks Continue

There was no public indication of progress on the impasse after Thursday's opening discussions, called just two months after the EU and China had signed a quota deal to avert a trade war.

Chinese exports, surging since a global system on textile quotas was abolished at the beginning of the year, quickly reached those agreed limits, leaving millions of products blocked by EU customs officials.

"The Chinese side expressed its concern over the textile products blocked at customs in EU countries," a Chinese commerce ministry spokeswoman told AFP in describing Thursday's negotiations.

European Union negotiators said the backlog of products was "not in the interests of EU traders and consumers," she said.

According to the French trade ministry earlier this week, 48 million sweaters, 17 million pairs of trousers, some 500,000 blouses, 1.6 million T-shirts, 3.4 million bras and 1,470 tons of flax yarn are being held up.

Resolution of stand-off in interest of both parties

"The atmosphere of the discussions with our Chinese colleagues is, as could be expected, constructive and friendly, given that of course it's in the interest of the two sides to resolve this problem as quickly as possible," EU commission spokeswoman Amelia Torres told journalists in Brussels Thursday.

EU officials in Beijing refused to comment on the talks other than to say that negotiations had resumed in earnest Friday.

Lu Jianhua, director of the Ministry of Commerce's foreign trade administration department, headed up the Chinese side, while Fritz-Harald Wenig, a trade director with the European Commission, represented the EU.

China's textile exports to Europe surged to 2.1 billion dollars in June, up 85 percent over the same month last year, as rush orders for Chinese goods soared while negotiators hammered out the new quotas, China's trade ministry said.

A senior Chinese trade official said part of the problem was that the EU and China agreed that the period between June 11 and July 20 was needed to set up mechanisms to monitor the textile trade and the implementation of the agreement.

Mass influx of Chinese products

"During this period, 10 categories of Chinese products could be freely imported to EU without any application for licenses, and traders in both China and EU rushed (orders) in order to avoid the quantity controls," the unnamed official said in a comment posted on the commerce ministry website. "The irrational activities of enterprises in China and EU brought on the furious increase of the ... products."

In accordance with normal trade practices, credit guarantees would have already been issued by buyers before the shipping.

European retailers could thus be facing hundreds of millions of dollars in losses not only for the goods, but additional shipping and storage costs, industry sources said.

China has protested the re-implementation of US and EU textiles quotas following the end the long-standing global quota system as a move counter to free trade and ongoing World Trade Organization trade liberalization talks.

The United States has invoked WTO "safeguards" that limit Chinese textile imports in at least six categories to 7.5 percent annual growth and is currently negotiating with China to implement similar limits on nearly 20 categories.

US negotiators are expected in Beijing next week to restart talks on the issue.