Officials from the Chinese and European textile industries have met for a second time as part of the Textiles Trade Dialogue to discuss market access, production and investments once quotas have been lifted at the beginning of 2005.

The Textiles Trade Dialogue was established on 6 May 2004 when Chinese Premier Wen Jiabao visited Brussels.

At the time, the EU said it was setting up a WTO-compatible monitoring system of Chinese textiles from 1 January 2005 to ensure a smooth transition to a quota-free trade.

The most recent discussions in Beijing are said to represent a concrete implementation of this decision and a continuation of talks at a technical level.

The textiles trade dialogue between China and the EU is intended to address matters of common interest in the textiles and clothing trade area.

Among these issues is the critical question of how to ensure that trade in textiles and clothing proceeds smoothly after the elimination of quotas on 1 January 2005.

The EU is pushing for progressive rather than sudden textiles trade growth after the removal of quotas, saying that a surge in Chinese exports to the EU, coupled with decreasing prices, could have severe consequences on third country suppliers to the EU.

The EU has already indicated that in order to track imports of the most sensitive textiles and clothing products it will establish a WTO-compatible monitoring system for Chinese textiles imports from 1 January 2005.

China is the EU's largest supplier of textiles and clothing products. In 2003 such imports from China represented €12.3 bn or 17.5 per cent of total EU imports in this sector. At present, imports from China still subject to WTO quotas represent 12 per cent of China's total textile and clothing exports to the EU.