European Trade Commissioner Peter Mandelson today warned the European Union would take action if no deal was reached with China over its surging textile exports.
He is in Shanghai for last-minute talks with China, which has until tomorrow to agree to curb the rise in exports of T-shirts and flax yarn to the EU to 7.5 per cent compared with the previous year, or face temporary quotas on these products within days.
The United States has already slapped caps on seven textile products, provoking an angry reaction from Beijing.
“We hope to achieve an agreement with the Chinese government about what we are going to do about the textiles explosion which is affecting Europe and so many developing countries,” Mr Mandelson said in Shanghai.
“If we don't make an agreement we will have to take other measures,” he said without elaborating. “This question has been dragged on over many days. We have a limited opportunity.“
Mr Mandelson is expected to have lunch with Chinese Commerce Minister Bo Xilai and then hold talks in the afternoon.
Mr Bo said that China would protect the rights of its textile industry in talks with the United States and EU, but would act in line with World Trade Organization (WTO) rules.
Mr Bo has already said he reserves the right to ask the WTO to adjudicate if China cannot reach agreement with Brussels and Washington.