China to protect its textile industry -Bo
(Agencies)
Updated: 2005-06-09 16:29

China will protect the legitimate rights of its industry in talks with the United States and the European Union over surging textile exports, Commerce Minister Bo Xilai said on Thursday.

Chairman for the Council of Trade in Services Alejandro Jara (L) speaks with Chinese Minister of Commerce Bo Xilai (C) and Shanghai Mayor Han Zheng (R) at the Forum on World Trade in Services in Shanghai, China, June 9, 2005. China will protect the rights of its industry in talks with the U.S. and the E.U. over surging textile exports, Bo said on Thursday. [Reuters]

China has until Saturday to agree to curb annual growth in shipments of T-shirts and flax yarn to the EU to 7.5 percent or face the imposition of temporary quotas on these products within days. The United States has already slapped curbs on seven products, provoking an angry reaction from Beijing.

"During the process of the talks, China will protect its industry's legitimate rights, and on the other hand will act in line with WTO regulations, " Bo told reporters after speaking to a forum in Shanghai.

Bo did not go into details, but he has already reserved the right to ask the World Trade Organization (WTO) to adjudicate if it cannot reach agreement with Brussels and Washington.

On joining the WTO in 2001, China agreed to let member states restrict imports of clothing and textiles if a sudden surge in shipments disrupted their markets following the abolition of a decades-old system of quotas on poor countries' textile exports.

Bo earlier this month questioned why Beijing should honor commitments to open its market to more foreign farm goods if the United States and Europe are slamming their doors to Chinese clothing following the end of the quotas, which lapsed on Jan. 1.

China's textile exports have duly surged since then. In addition, the EU said on Thursday imports of six categories of Chinese shoes had risen nearly 700 percent in the first four months of the year.

EU Trade Commissioner Peter Mandelson is likely to arrive in China on Friday to seek an agreement on restraining the surge of textile exports.

U.S. Trade Representative Rob Portman (news, bio, voting record) and U.S. Commerce Secretary Carlos Gutierrez held talks in China last weekend, but they yielded no breakthrough.

The standoff over textiles is one of two problems that risk souring diplomatic and economic relations with China, the other being Beijing's control of the yuan's exchange rate, which the United States and Europe say is too low for fair trade competition.

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