Shanghai Daily news

China and the European Union reached a deal early this morning in Shanghai that resolves a simmering dispute over the country's textile exports.
The agreement was designed to manage the growth of a wide range of textile exports through 2008, according to participants in the arrangement.
The deal was the result of negotiations between Chinese Commerce Minister Bo Xilai and EU Trade Commissioner Peter Mandelson.
"Today's agreement will give players on both sides clarity, certainty and predictability," Mandelson said this morning. "I believe that the overall settlement offers a fair deal for China while giving respite and much needed breathing space to textile industries in Europe and developing countries."
The agreement provides for reasonable growth in Chinese textile exports to Europe while giving the EU textile industry time to adjust.
"I have always called for this issue to be resolved amicably rather than through the EU taking unilateral measures, even though we are legally entitled to do so under China's WTO Accession Protocol," said Mandelson.
"My preference has always been to seek an agreement with China that reflects our strategic partnership and our mutual interest in strengthening our trade relations," said Mandelson, who flew to Shanghai yesterday morning for the last-minute talks with Bo.
Under the deal, the growth rate in Chinese textile exports to Europe will be capped at the present level through the end of this year. In 2006 and 2007, the level will be gradually ramped up toward full liberalization in 2008.
"Today's deal will help create a stable market environment over the long term for Chinese textile firms, and the EU market will now have a stable import environment," Bo said after wrapping up 10 hours of negotiations.
"It is the first time in history that a developing country has gained such rapid export growth among developed trade partners."
After joining the World Trade Organization in 2001, China agreed to let member states restrict imports of clothing and textiles if a sudden surge in shipments threatened to disrupt their markets when global textile quotas were eliminated on January 1.
The EU, which claimed that textiles imports from China have increased substantially this year, said late last month that it would institute safeguard measures against some textile imports from China.
The EU had requested formal consultations on two categories of textiles and has almost completed investigations of seven other categories.
China had until today to agree to curb the rise in exports of T-shirts and flax yarn to the EU to 7.5 percent compared with the previous year, or face the imposition of temporary quotas on these products.
The United States has already slapped caps on seven textile products, provoking an angry reaction from Beijing.
China is keen to support an industry that employs 19 million people and is a vital cog in its export-oriented economy.
US curbs may cost China US$2 billion and affect the lives of 400,000 workers, said a senior official at the Chinese textile industry trade association.