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EU trade chief urges China to seize textile export opportunity

Afp, Shanghai
EU trade chief Peter Mandelson held "frank" talks Friday with Chinese Commerce Minister Bo Xilai, urging China to seize the opportunity to prevent limits being slapped on its soaring textile exports.
China has until the end of Friday to agree to slow growth in exports to the European Union of T-shirts and flax yarn to 7.5 percent a year or face temporary caps on the products.
"We have a limited opportunity," Mandelson told reporters before the talks got underway. "There is no question of this being dragged on over many days.
"I hope to achieve an agreement with the Chinese government on what we are going to do about the textiles explosion which has affected Europe and so many developing countries.
"We will have a negotiation and I hope an agreement but if we don't have an agreement, then we'll have to take other measures."
The EU has requested formal talks at the World Trade Organisation (WTO) with China on the issue, citing a huge jump in exports of Chinese T-shirts and flax yarn following the end of a global textile quota system on January 1.
Under the rules on China's WTO accession in 2001, a request for talks enables Beijing's trading partners to place a temporary cap on textile imports if China does not first take its own voluntary measures within 15 days.
Washington has already set limits on seven types of Chinese textile shipments. That dispute has also been fueled by concerns in the Us that China's currency is undervalued, giving it an unfair advantage on the global market.
Bo and Mandelson broke for dinner after four hours of what Bo said were "frank" negotiations.
"We're still in the process of talking. I feel the two sides are both very frank. We are carrying out technical talks," he said.
On Thursday Bo said how the dispute pans out will become a yardstick for how developed countries enforce free trade.
China argues that attempts by developed countries to impose limits on textiles are discriminatory and protectionist, undercutting the very principles they are promoting.
In a statement on the ministry of commerce website Friday, Bo appeared to be giving little ground, vowing to fight for the rights of China's textile industry.
"It is our job to serve the industry amid the textile trade dispute ... we will make our greatest efforts to defend the rights of our textile industry," he said after meeting industry leaders in shanghai.