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EU-China textile talks continue
Europe and China began a third day of talks on resolving a trade dispute that has left millions of items of Chinese-made clothes blocked at European ports and retailers threatening to sue the EU over losses.
China's commerce ministry also announced a fourth round of textile talks next week with the United States, which is pushing to limit Chinese imports to protect its own industry. An EU official described Saturday's meeting as "constructive and frank" amid indications that negotiations could continue throughout the weekend. "Talks have started (Saturday), but as of now we have no information other than they are being held in a constructive and frank way," the official told AFP. "Finding a solution to huge amounts of blocked goods in European ports is an important issue that needs to be resolved as quickly as possible," the official said. The talks are being held just two months after the EU and China signed a quota deal capping annual import growth rates on 10 Chinese textile products and averting a costly trade war. Chinese exports, surging since a global system on textile quotas was abolished at the beginning of the year, have already reached the annual limits in seven of the categories and European customs officials have refused to accept any more of these items. The impasse has driven a rift between EU states hoping to protect their domestic textile manufacturers from cheap imports and the wealthier states that see the Chinese goods as bargains for consumers. European retailers, who have paid for the goods and face additional storage and shipping fees, are blaming the EU trade commission for botching the earlier textile talks, blocking the goods and failing to foresee the impasse developing. An association of German retailers warned Friday that it might demand monetary compensation from the EU if the blocked Chinese garments were not released. "If the problem is not resolved by the end of next week, and if the merchandise has not left the warehouses, we will act," declared Rolf Pangels, head of the BAG federation, which represents large- and medium-sized retailers. Some 75 million items of Chinese-made clothing are being stockpiled in European ports, including sweaters, trousers, blouses, T-shirts, bras and tons of flax yarn. BAG head Pangels said the federation could seek damage compensation and interest on behalf of textile importers, adding that BAG was "confident of the chances of success for such a complaint." "If we let things continue the way they are much longer, we will reach a point where German consumers are made to freeze this winter because sweaters are rotting in the warehouses," Pangels warned. Another German retail federation, HDE, which groups all players in the textile sector, is predicting "the first bankruptcy announcements by small and medium-sized importers of Chinese merchandise" in the coming days, said its vice president Klaus Magnus. EU officials indicated that the talks could last through the weekend. 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. China has opposed the quotas as counter to the principles of free trade. Chinese manufacturers want all the quotas lifted, but it appeared that the government would accept an expansion to the 2005 quotas as a way to resolve the current impasse. China and the United States meanwhile announced Saturday they will hold another round of their own textile talks in Beijing from Tuesday. The United States also wants to limit booming Chinese imports to protect its domestic industry. At a two-day meeting in San Francisco this month, US and Chinese negotiators failed to overcome "fundamental differences" on how to cap the exports. The US textile industry wants a deal that limits Chinese imports in more than 19 categories of apparel to a 7.5 percent growth rate per year until 2008.
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