Associated Press

Brussels, May 25:

EU trade chief Peter Mandelson, an Englishman, turned to an old English remedy to cure all problems when he met Chinese trade negotiator Gao Hucheng — he served him up a nice cup of tea.

Gao had a sore throat and the tea was green tea, but it seemed to do the job and Mandelson reported the two men held constructive talks as they sought a way out of their textile dispute on the eve of the EU’s decision on whether or not to take further measures to contain a surge in Chinese exports.

Underlining a willingness to find a compromise without resorting to restrictive quotas, Mandelson lauded Gao for ‘good work, good progress’ during technical talks between the two sides. “The tone of the meeting was constructive. Talks are continuing,” said an EU statement after the one-hour negotiating session between the two. The EU’s executive Commission will discuss the issue again during its weekly meeting today.

Serving tea for Gao and offering him eucalyptus mints to treat a sore throat, Mandelson tried to break the trade tension as soon as the session started. “This is another act of Euro-Chinese friendship,” he told a hoarse Gao, China’s top textile negotiator.

Because of the good atmosphere between the two, a negotiating window could be offered until the end of the month before the EU head office decides to launch bilateral consultations that could pave the way for restrictive measures against Beijing, an official, who asked not to be identified, said.

Last week, China announced new tariffs on its surging textile exports in a concession aimed at easing a clash with the US and Europe over the textile trade.

The 25-nation EU claims its textile industry has been seriously hurt by the opening of its market to Chinese exports on January 1, losing production and employment. Mandelson has said though that consumers, distributors and retailers took a different view and seized a market opening.

Under the terms of China’s World Trade Organisation (WTO) membership, if another member state can establish that Chinese textiles are disrupting the market, it may request bilateral consultations at the WTO.

At that point, China must restrict its exports to that member to 7.5 per cent more than the volume exported in the previous 12 of the last 14 months. Most EU nations on Monday backed the move toward restrictive measures. Mandelson said the glut in Chinese imports needed to be contained to give European producers breathing space to adapt to an open global market.

He said EU production and employment already have slumped dramatically in the T-shirt and flax yarn sectors since the beginning of the year, when Chinese exports quotas were lifted under WTO rules.

Growth in T-shirt imports stood at 187 per cent over the first four months of the year compared to the year-earlier period, and at 56 per cent for the flax yarn sector.

Threat to renege

BEIJING: China threatened to renege on a promise to impose tariffs on 74 categories of textile products if the same items were subject to limits from US and European governments. “If the US and the EU formally carry out restrictions on any of these categories, we will not impose tariffs on the items in question,” a commerce ministry official said. China on Friday made a conciliatory gesture to the US and EU to ease simmering trade tensions, announcing it would raise export tariffs on 74 categories of textile products from June 1. — AFP