China and Eu Reach Textile Imports Deal

China and the EU today agreed an end to the so-called "bra wars", that will allow millions of Chinese garments to enter the EU.

"I would like to confirm that Chinese and European negotiators have managed to reach an agreement on the textiles that were stopped in customs," the EU commission spokeswoman, Francoise Le Bail, told reporters in Brussels.

Some 70m items of clothing, including bras and T-shirts had been stuck in ports and warehouses because they had exceeded EU quotas drawn up in June. Under today's agreement, Beijing agreed to count roughly half of the blocked goods as part of its 2006 EU export quota.

"I can assure you the result is fair and equitable," the Chinese prime minister, Wen Jiabao, said. "It is acceptable to both sides and conducive to both the business communities and the consumers."

The British Retail Consortium welcomed the agreement, but with reservations.

"Retailers will welcome a compromise that allows Chinese garments into the EU - but why should consumers be penalised next year when prices will increase?" Alisdair Gray said. The organisation fiercely criticised the EU's June decision to limit Chinese textile imports.

The Confederation of British Industry said the agreement only postponed the problem.

"Whilst this agreement means the blocked goods will reach consumers, by 'borrowing' from next year's quota it is only delaying the problem," said Sir Digby Jones, the CBI director-general.

Sir Digby said the real answer was to allow access to the EU for goods produced in China and for EU producers to adapt to the competitive challenge.

The "bra wars" broke out following the end of the multifibre agreement - a system that limited textile exports to the industrialised world - at the start of the year.

The EU found itself deluged with Chinese textiles that led to howls of protest from European producers. To alleviate their plight, the European commission set quotas in June to limit growth of Chinese textile imports to 8% and 12.5% a year in 10 categories of Chinese textiles during the period 2005-2007.

But the quotas were quickly breached as buyers rushed to put in their orders. With the quotas filled, millions of items of clothing were stuck in ports and warehouses. As of today, no fewer than 47 million pullovers, 18 million pairs of trousers and 12 million bras had piled up at EU ports.

Countries with strong retail sectors, such as the Nordic states and Germany, had demanded the swift release of the goods. But EU member states with large textile industries of their own, such as France, Italy and Spain, pushed for cuts in Beijing's import quotas for coming years in return for releasing the impounded goods.

If confirmed that about half of the blocked goods will be allowed into the EU under China's 2006 quotas, the deal could up export opportunities for rival producers, such as India, Vietnam and Cambodia, that are not subject to quotas.

Meanwhile, US-Chinese talks on a similar dispute broke down last week when the US announced it was re-imposing quotas in two categories of Chinese clothing and textile imports, after negotiations in Beijing had failed to make progress.