China and EU hold talks on clothing import row

China is hoping talks with the EU will help resolve a trade row that has left Chinese textiles piling up at European ports and threatens deliveries of autumn and winter clothing, news reports said today.

Shiploads of Chinese textile products have been stopped by EU Customs because they exceed limits recently imposed to help stem a surge in imports that followed the end of a worldwide quota system at the beginning of the year.

EU negotiators were travelling to Beijing for talks on the trade dispute, which threatens deliveries of autumn and winter clothing lines in European stores.

“A major issue is to find a solution for Chinese textile products detained at EU ports,” the state-run newspaper China Daily quoted Lu Jianhua, director of foreign trade at the Commerce Ministry, as saying.

First, the two sides must agree on the amount of textiles and garments already blocked by EU Customs, Lu said. Shirts, bras and flax yarn have now joined sweaters, men’s trousers and blouses in overrunning EU limits on import volume increases for 2005 that China agreed to in June.

An EU official said trade experts had a range of options, including bringing forward part of the 2006 allowance to this year.

The China Daily quoted unnamed Chinese industry officials making the same suggestion.

However, another state-run newspaper, China Business News, cited officials saying that Beijing was unlikely to agree to use up next year’s allowance early, likening that to “eating dinner at breakfast time”.

The report said Beijing was expecting European concessions on the issue.

European retailers have been urging the EU to relax the import limits, complaining they cannot stock shelves with goods they ordered from China without obtaining a special import licence.

Earlier this month, EU Trade Commissioner Peter Mandelson won backing from EU states to increase the 2005 allowances for sweaters as the number of stranded shipments increased.

However, he blamed greedy retailers for rushing to place huge last-minute orders of Chinese clothing to get goods into Europe ahead of a July 12 cut-off date.

EU negotiators will not receive new orders allowing them to negotiate new limits for the other categories until EU countries meet again tomorrow.

The European Commission has placed 10 categories of Chinese textile products, including T-shirts, sweaters and bed linens, on a watchlist.

It has also started an investigation into claims that Beijing and India are dumping shoes on European markets, and has threatened punitive customs duties on the imports to raise shoe prices.