By  on June 1, 2005

GENEVA — European Union Trade Commissioner Peter Mandelson said Tuesday that there was an opportunity to broker a deal with China to stem its surging textile and apparel exports.

"I'm still hopeful that the European Union and China can reach a negotiated conclusion on how to manage this transitional period from quotas to the post-quota era," he said.

However, Mandelson was pessimistic that the troubled Doha round of global trade talks would advance by the end of July, ahead of a crucial trade ministerial summit set for Hong Kong in December.

Mandelson said the decision of the Chinese government — announced by Commerce Minister Bo Xilai on Monday — to scrap self-imposed export taxes on 81 textiles and apparel products starting June 1 "makes it all the more desirable to reach agreement with the Chinese."

China moved to remove the duties it placed on products this year in response to quotas on exports by the U.S. and the EU.

Mandelson said the Chinese leadership has stressed that Beijing "wants to find a mutually satisfactory way forward ... "

"Politics aside, the Chinese are likely to go for a deal," said an ambassador from a major Asian textiles and apparel exporting country who asked not to be identified. "Market certainty is always better then market uncertainty, and the Chinese always think the latter is better."

After discussions with World Trade Organization chief Supachai Panitchpakdi and trade ambassadors from key countries in the Doha talks Monday, Mandelson warned he did not detect "the sense of urgency that's needed." He said the assessment here is that expectations for the end of July "are at a low end."

Mandelson said the talks require political leadership and argued there is a need to take advantage of a trade ministers meeting in Dalian, China, in July to seek breakthroughs.

France's rejection of the EU's proposed constitution, and the possibility it might have a domino effect in the U.K. and among other EU members, could create more difficulties in the round and for trade issues in general, top non-EU envoys said.

"It's clear the protectionist forces are together and the 55 percent also want a hard line against China," said a WTO ambassador, who spoke on the condition of anonymity.France is bound to take a tougher line on agriculture, giving EU negotiators little room to maneuver in the talks, the envoy said.

Mandelson said the segments in the Doha talks on nonagricultural market access, which aims to lower tariffs and other barriers to trade in industrial goods, "have been stalling through lack of progress in agriculture."

The EU trade chief conceded the outcome in France raises difficult issues, but underscored that the EU needs "to embrace liberalization and ensure that it works for Europe, creating jobs and opportunities."

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