'Bra wars' deal agreed

Monday, 5 September 2005 12:00 AM

A deal has been struck that could resolve the ongoing textiles trade dispute between the European Union and China if approved by EU member states.

The agreement would allow millions of Chinese-made goods to be released from ports where they have been blocked since EU quotas were put in place in June.

About 75 million items held in warehouses would be allowed into the EU but half of them would count against next year's quotas.

News of the deal broke today after long-standing negotiations reconvened yesterday between EU trade commission Peter Mandelson and his Chinese counterpart, Bo Xilai.

Tony Blair is in Beijing today for two days of summit talks with China's president Hu Jintao, and speaking ahead of the meeting, he stressed the "vital" strategic relationship between the EU and China.

"I think it's important to see this as indicative of the world coming to terms with just the sheer economic force and power that China represents now and is going to represent even more in the future," he told Today.

"Within a few years it's going to be the second largest economy in the world, eventually it will be the largest."

Asked whether he regretted the fact that Britain had voted for the quotas package in the first place, when Scandinavian countries had insisted there should be free trade, Mr Blair replied that free trade was "right" but that "you've got to get there in stages".

"Actually what has been happening is that over time we will be moving to complete free trade," the prime minister said.

"In the meantime however it's not unreasonable for some of those people who are producers in Europe to be saying, 'look, we've also got our own interests that need to be taken account of in this process of transition'.

"But let's not be in any doubt at all, the overall trend in this is massively towards opening up markets and that's got to be done, as I say, in a way that recognises the interests of consumers and retailers and the interests obviously of those producers who worry about things like labour costs and wages and conditions and so on."

The dispute, nicknamed "bra wars" after one of the key problem categories of exported Chinese clothing, remains unresolved between China and the US.

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