China-EU textile talks end without agreement

A second day of talks between China and the EU ended on Friday with no deal on revising a two-month-old textile trade pact, but negotiators agreed to meet at the weekend in hopes of hammering out an agreement.
The June deal, which capped growth in 10 lines of Chinese textile exports at 8-12 percent a year, was hailed at the time as a sensible response to a deluge of low-cost clothes from China following the scrapping of global textile quotas on January 1.
But most of the new ceilings have already been reached, leading to vast quantities of garments such as bras and blouses being held up by EU customs.
European retailers are furious that they cannot take delivery of hundreds of millions of euros worth of goods that they bought for the holiday shopping season.
The new round of talks, which began in the Chinese capital on Thursday, failed to reach agreement on Friday despite lasting almost until midnight. The two sides will meet on Saturday in hopes of clinching a deal, an EU spokesman in Beijing said.
Negotiators are exploring solutions such as transferring quotas that have not been filled to more popular lines, "borrowing" from next year's quotas or allowing importers to bring in goods ordered before the June 10 curbs.
Based on the outcome of the talks, the European Commission could put a proposal to the 25-nation bloc next week on clearing the warehouses, a commission official said.
"We could in theory begin unblocking goods very fast," the official told reporters in Brussels. "The timetable is likely to be a fairly swift one."
Textiles have been a source of international trade friction this year following the January 1 expiration of a long-standing global pact limiting textile trade.
Experts have long predicted that China, with its huge, modern factories and vast pool of cheap labour, would be the big winner from the textiles free-for-all.
The June deal allowed Beijing to avoid EU measures, permitted under world trade rules, to cap growth in China's textile exports to 7.5 percent a year until the end of 2008.
Beijing contends that its inexpensive products are a boon to European retailers and consumers.
Chinese negotiators will make the same argument next week when they sit down with US negotiators in Beijing to try to thrash out a similar deal to replace the quotas Washington has imposed following a surge in textile imports from China.