China's recently-signed textile agreement with the European Union (EU) will not affect the country's textile exports to the European economic bloc in the next year, according to Commerce Minister Bo Xilai.

An agreement signed on September 5 between Bo and his counterpart, EU Trade Commissioner Peter Mandelson ended an EU-China impasse that left millions of Chinese-made garments in European ports because they exceeded import quotas agreed by both sides in Shanghai in June.

The latest agreement means some of the products held up will enter the EU, while others will be added to China's 2006 textile quota. But the 'borrowed' figure was negligible, Bo said.

"The quotas borrowed for next year account for only 1.7 percent of the 1.4 billion items of garments in seven categories that China will export next year," the minister told Chinese media.

Bo explained that the quotas from next year were borrowed in just three categories: sweaters, bras and pants, and the amounts were not large. Five percent was borrowed for sweaters, 2.63 percent for pants and 2.57 percent for bras. The borrowed figures amounted to 24 million items, Bo said.

"As the EU has allowed China after two rounds of negotiations to export 330 million pairs of trousers to the EU from 40 million in 2004, there is no need for us to care about the 10 million borrowed," he said.

The EU issued some 530 million import permits for seven categories of textile products for the "vacuum period" before the bilateral memorandum of understanding, which was signed in Shanghai in June, was implemented.

That figure is 80 million over the 450 million agreed previously.

The minister said the September agreement, which both sides called a "win-win" situation, not only resolved the tough issue in a short time but also showed the flexibility of the negotiating parties.

"It reflects a conflict-solving mechanism, with which the two sides were able to avoid a trade war, " Bo said. "Both are satisfied with the result."

He added that Chinese exporters benefit from the new agreement as the EU has increased the final quotas from June's Shanghai agreement.

The minister said the agreements had greatly improved China's export environment to the EU.

Bo contributed the stockpile in Europe to Chinese exporters sparing no effort to export as much as possible during the "vacuum period."

(China Daily September 21, 2005)