EU Trade Commissioner Peter Mandelson and his Chinese counterpart in Beijing reached a deal on future quota
limits, allowing 75 million garments into the EU, an EU official said on Monday, speaking on condition of anonymity.


British Prime Minister Tony Blair, who is attending the annual EU-China talks as part of Britain's turn at the rotating presidency of the 25-nation European Union, says it is beneficial to both sides to develop the relationship.


But hopes of Monday's talks taking the relationship to a new level have been hindered by the future of Europe's embargo on arms sales to China.

 

Beijing remains at odds with Washington and Brussels over caps they imposed to protect domestic producers.

 

"We are now building upon three decades of successful cooperation. Our partnership should be about greater understanding and trust between the EU and China," Blair said in an interview with Chinese state media, including the Xinhua news agency.

 

Security issues

 

Blair's spokesman said that on top of the usual trade-focused agenda, global political and security issues had been added in the wake of the bombings in London which left 52 people and four bombers dead in July.

 

Human rights issues would also be discussed.

 

"Our partnership should be about greater understanding and trust between the EU and China"

Tony Blair,
British prime minister

Aside from the summit, Blair will hold talks with China's top leaders on Tuesday before heading to India.

 

Travelling with him are about 40 top executives from such British and European companies as Airbus, BP, British American Tobacco, Deutsche Post, GlaxoSmithKline, Rolls Royce and Royal Dutch Shell.

 

Also in Beijing are European Commission President Jose Manuel Barroso and EU foreign policy chief Javier Solana.

 

New dialogue

 

"We will agree on a new strategic dialogue with China and, through a joint declaration, launch an important new partnership to enable us to act jointly on climate change," said Barroso of the summit.

 

But casting a pall over the eighth such meeting is a trade row that has left 80 million Chinese-made garments piled up in European seaports, unable to be delivered to shops under a quota pact made in June.

 

Last-minute talks between EU Trade Commissioner Peter Mandelson and Chinese Commerce Minister Bo Xilai were continuing in Beijing in the hope that a solution could be reached before the summit ends later on Monday.

 

EU quota

 

The delivery to European retailers of the products is being held up because they exceed a EU quota imposed in June and put into effect on 12 July to protect European manufacturers.

 

Textile products made in China
are piling up in European ports

France, Greece, Italy, Portugal and Spain are reportedly opposing a proposal to let goods ordered before 12 July enter the European Union, which is a key market for Chinese exporters.

 

As well as textiles, the summit will discuss issues such as political, economic and energy cooperation, and China's participation in the Galileo space project and the international thermonuclear experimental reactor (ITER).

 

Several important trade and investment deals are to be sealed and signed in Beijing, including one that will see Europe's Airbus consortium deliver a fresh batch of aircraft to an as-yet-unidentified Chinese air carrier.

 

"It's not an insubstantial amount of money," Blair's spokesman said.

 

China-US relations

 

China's textile exports to the US nearly doubled in the first six months to $7.4 billion, causing alarm in textile-producing states and heightening fears about the ballooning US trade deficit with China, which hit a record $162 billion in 2004.

 

Earlier this year, the Bush administration slapped safeguard curbs on imports of Chinese-made trousers, shirts, underwear and cotton yarn.

 

It imposed extra curbs on bras and synthetic fabric last week just hours after the failure of talks aimed at reaching a comprehensive deal governing imports.