<http://www.guardian.co.uk/business/story/0,3604,1558469,00.html>
Mandelson plan to end Chinese trade row Charlotte Moore Monday August 29, 2005 Guardian Peter Mandelson, the EU trade commissioner, plans to outline proposals to free up millions of Chinese-made garments held in European ports, as talks between EU and Chinese trade negotiators enter their fifth day today. Hopes were rising last night of a deal to solve a dispute that retailers have warned could reduce the supply of cheap clothes to the UK. As EU and Chinese trade negotiators prepared to meet, Mr Mandelson said he would put forward proposals to member states to release the clothes to retailers. He gave no details, but told the BBC: "I hope member states will cooperate and won't prevent the speedy passage of those procedures. If they cooperate, I believe we will be able to unblock all the goods currently held at customs by the middle of next month." He defended his decision to stay on holiday on Italy. "Every day of my holiday, I spent dealing with this issue," he said. But the Conservatives accused him of being "completely out of touch" and agreeing to "absurd European protectionism". The crisis, which has left millions of low-cost Chinese knitwear, trousers, bras and shirts languishing at customs ports, erupted as result of a serious glitch in the implementation of Chinese textile import quotas. The quotas were introduced to stem a tide of Chinese clothes that have flooded the EU market since the phasing-out of the multi-fibre agreement, which imposed quotas on Chinese exports, at the beginning of this year. But Mr Mandelson said that flaws in the timing and execution of new restrictions had resulted in millions of clothes being exported from China and then not being allowed into Europe. The new system involved putting a ceiling on the annual rise in Chinese exports. The British Retail Consortium complains that retailers were only told about the restrictions after the clothes had been shipped from China, and is calling for the blocked garments to be allowed in. But France, Italy and Spain, whose textile industries are struggling to compete against China's low-cost products, want these imports to count against next year's quotas. Alisdair Gray, a director of the BRS, said this was unacceptable: "We want all blocked product to be allowed into Europe and not to count against next year's quotas." Counting the stranded garments against next year's quota would penalise low-income consumers as it would reduce the supply of cheap clothes, he said. "Why are we protecting a small group of textile producers and penalising a wider group of consumers?" he said. A six-strong team from the EU is in Beijing negotiating with officials. No details about the nature of the talks were revealed by the EU, but Chinese media sources have said Beijing is not keen to bring forward next year's quotas. The state-run newspaper China Business News said last week that Chinese officials thought this would be like "eating dinner at breakfast time". Mr Mandelson said the quotas had been introduced to give European manufacturers breathing space to adjust to the new reality of China as the cheapest producer of textiles in the world. He warned that a more protectionist stance was not on the cards: "The protectionist route is a cul-de-sac." Mr Gray concurred, saying there was no point in protecting an uncompetitive textile industry. Europe's manufacturers should adapt to the new world and focus on more lucrative activities, such as fashion design and worldwide marketing, he said.
