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EU, Chinese Trade Leaders Discuss Textile Dispute Ahead of Beijing Summit

European and Chinese trade leaders have held talks ahead of Monday's EU-China summit in Beijing. EU leaders are hopeful an agreement can be reached on a pressing textile trade dispute.

EU Trade Commissioner Peter Mandelson met with Chinese Trade Minister Bo Xilai on Sunday on their textile trade dispute that has blocked tons of Chinese-made clothes from reaching European stores.

The dispute began this year when global quotas expired, prompting European textile producers to complain China was flooding markets with cheap goods and driving them out of business.

Speaking to reporters in Beijing, Mr. Mandelson said he is optimistic a compromise could be reached in time for this week's EU-China summit. "We went into this agreement together. It is strong. It is robust. It will endure. And, whatever teething troubles it has, we need to sort them out together," he said.

Mr. Mandelson and Minister Bo had ironed out a deal in June for new limits on Chinese imports. But China quickly exceeded those 2005 quotas, and some 75 million garments are sitting impounded in European ports.

European retailers say their shelves may soon be empty, if the millions of T-shirts, trousers, and other Chinese-made clothes are not released.

EU and Chinese negotiators met for a week in August, but failed to resolve whether China would use some of its 2006 and 2007 import allowances now, or whether it could get an expanded 2005 quota without future cuts.

Any deal must have the approval of all 25 EU member states, which are divided between textile producing states wanting to limit Chinese competition and consumer nations, which want Chinese goods.

European Commission President Jose Manuel Barroso arrived in Beijing on Sunday, saying he thought a constructive solution was possible.