The European Union and China hold a summit tomorrow in Beijing, and EU commission boss José Manuel Barroso has arrived in the Chinese capital with a full delegation for the talks.
Along with him is Trade commissioner Peter Mandleson, who has to juggle the hottest potato on the agenda, a flood of Chinese textile exports that is currently bottled up in European ports. Mandleson went straight into negotiations on arrival, as the row has the potential to ruin the whole summit, but Mr. Barroso expressed confidence that the issue would be resolved. Negotiated 10 years ago, new rules allowing more Chinese textiles into Europe came into effect this January. When it was clear they were inadequate, the EU and China struck a new deal in June, but this too proved unsatisfactory. Simply put, EU producers underprepared for the Chinese invasion, and got hammered in the shops, losing a third of the market in some sectors. Europe’s big shopping chains are happy they can buy cheap, but the goods are impounded despite being paid for. A classic EU free trade-protectionist split is compounded by a north-south one, pitting strong retailing nations like Germany and Sweden against producers like Spain and Italy.