Mandelson hopeful of striking deal with Beijing on garment exports

EUROPEAN Trade Commissioner Peter Mandelson said on Sunday he hoped to strike a deal with Beijing before the end of the day to unblock millions of Chinese garments piled up in EU ports because they exceed import quotas.

Mr Mandelson is holding talks with Chinese Commerce Minister Bo Xilai to resolve a problem that has split the 25-member European Union, embarrassed the European Commission, the EU executive, and marred the run-up to an EU-China summit in Beijing today.

“I hope that we will get agreement, if we’re going to get agreement at all, before the summit,” said Mr Mandelson.

EU diplomats said any agreement could be approved by the EU’s member governments before the one-day summit.

Mr Mandelson, who negotiates trade policy on behalf of the 25 member states, failed to secure backing in Brussels on Friday for the immediate release of some 75 million bras, sweaters and other goods piled up in ports and warehouses or en route to Europe. The garments have been impounded by customs because quotas that the EU agreed with Beijing in June were quickly filled.

Countries with strong retail sectors, such as the Nordic states and Germany, have demanded the swift release of the goods. Member states with large textile industries of their own, such as France, Italy and Spain, have insisted that Beijing cut its import quota levels for 2006 and 2007 in return for the EU’s allowing in more Chinese imports in 2005 than agreed in June.

Mr Mandelson was coy on how he would resolve the problem. “There are different options, different permutations,” he said.

European Commission president Jose Manuel Barroso, who is also in Beijing for the summit, said he hoped Mr Mandelson’s talks would succeed and end the commission’s headaches.

“The goods will not be held up for a moment longer than we can avoid,” Mr Barroso said. He added that both Brussels and Beijing were strongly committed to the June deal, which created a breathing space to slow down a dramatic burst in Chinese exports to Europe following the abolition of global textile quotas on January 1.

“It is not a return to the system of quotas of the past. We are not turning the clock back,” he said. “We believe the agreement is a robust, measured response to European and Chinese needs to manage a transitional period to smooth this change.”

However, he said neither the EU nor China had anticipated the flood of garments following the June 10 deal as buyers and sellers rushed to get garments in under the wire.

“The agreement has some implementation problems caused by the sudden and unexpected arrival of pre-contracted goods in the first month of the agreement which, frankly, overwhelmed administrative arrangements.”

Mr Mandelson also defended the pact, which allowed growth of between 8% and 12.5% a year in 10 categories of Chinese textiles for the period 2005-2007.

“It is strong, it is robust and it will endure, and whatever teething troubles there are we will sort them out together,” he said.

Far from the deal having failed, he noted that the United States was seeking to negotiate a similar medium-term arrangement to replace growth curbs of 7.5% a year that Washington has unilaterally imposed on nine lines of Chinese textiles. A fourth round of talks between China and the United States ended in Beijing last week with the two sides far apart.