Shanghai Daily news

China and the European Union have provided a shot in the arm for global free trade with an eleventh-hour agreement on textile trade over the weekend.
The 10-hour negotiation session in Shanghai resulted in a win-win deal that allows for reasonable growth in Chinese textile exports and sufficient time for the EU textile industry to reform.
The deal would not have happened had either side lacked practical thinking or respect for the other's interest.
It proves that unilateral sanctions or the threat of sanctions are useless, unless no one wants free trade as honored by the World Trade Organization and everyone returns to the old fold of mercantilism.
EU Trade Commissioner Peter Mandelson said on Saturday that the overall settlement offers a fair deal to China while giving respite and much needed breathing space to the EU textile industry.
It is understandable the EU wants to protect its own textile industry, which has no cost advantage over most Chinese clothing and textile products.
It is also understandable that the EU is entitled to invoke WTO's special safeguard clause to restrict Chinese textile imports if a sudden surge in such imports substantially disrupts its market.
But something went wrong when the EU pointed a finger at China.
The EU used statistics only for the first quarter to support its argument that imports from China had surged. But even though the figures were correct, it was difficult to prove the EU textile market had been disrupted and that it was directly caused by Chinese imports.
Andy Mukherjee, a Bloomberg news columnist, has said the safeguard measure is protectionism at its worst. Unlike in anti-dumping investigations, there is no need for an importing country to prove the exporter was selling at prices below the cost of production; it's enough to allege the local industry was facing a threat.
In the face of the allegation from the EU as well as the United States, China has been both tough and flexible. On the one hand, China insists its textile export growth is normal, after the WTO abolished global textile quota restrictions on January 1. On the other hand, it has taken the initiative to increase tariffs on textile exports in both January and May.
What else should China do to prove it is a responsible member of the world free trade club? Its clothing and textile products are simply competitive.
As such, friendly negotiation is the only way out. Aside from the EU's legitimate concerns and China's responsible attitude, the overall rapid growth in China-EU trade calls for a practical mind. Both have a market too important for the other to ignore.
Unlike the EU, the United States last month slapped quotas on a number of Chinese clothing and textile products such as cotton trousers, shirts and underwear.
The US not only used flimsy figures, but also resorted to unilateral measures that hurt the interest of hundreds of thousands of Chinese textile workers.
China and the US also have mutually complementary economies. Protectionism for its own sake is the last thing the global economy needs.