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Last Updated: Sunday, 4 September 2005, 16:51 GMT 17:51 UK
Europe upbeat on end to quota row
Peter Mandelson in Beijing
Mr Mandelson is hoping for a swift resolution to the trade row
Europe and China have talked late into the night in a bid to strike a deal to unlock the doors of European warehouses holding blocked Chinese garments.

"There are no sticking points as such, but there's no deal until there's a deal," European Trade chief Peter Mandelson said during a break in talks.

Earlier, Mr Mandelson said he hoped to reach a deal ahead of an EU-China summit in Beijing on Monday.

The two sides are still locked in talks in an effort to break the deadlock.

Mr Mandelson's began negotiations with Chinese Commerce Minister Bo Xilai early on Sunday, after arriving in Beijing on Saturday.

The row over quotas, brought in as cheap Chinese goods flooded markets as trade quotas ended at the start of the year, has split the 25-member European Union (EU) and embarrassed the European Commission.

'Bra wars'

A similar dispute has also broken out between China and the US, with America blocking billions of dollars worth of textile goods to safeguard its own industry.

The goods will not be held up for a moment longer than we can avoid
Jose Manuel Barroso, EC president

On Friday, the row between the US and China intensified as Washington announced new limits on imports of Chinese bras and synthetic fabric soon after talks between the two sides broke down.

At the same time in Europe, Mr Mandelson's failed to secure backing in Brussels for the release of some 75 million T-shirts, sweaters and other goods.

Efforts to resolve the row have provoked division across the eurozone.

Divergent demands

Countries with strong retail sectors - such as Germany and the UK - want clothing released as soon as possible to prevent clothing shortages in shops.

However, countries such as Spain, Portugal and Italy, who have big textile industries, are insisting that quotas remain in force.

In particular they are demanding that if this year's quotas are increased then limits for 2006 and 2007 should be reduced.

Mr Mandelson has remained tight-lipped about how he intends to resolve the dispute, saying only: "There are different options, different permutations."

European Commission President Jose Manuel Barroso, who is also in Beijing for Monday's one-day summit, voiced hopes of a swift resolution to the row.

"The goods will not be held up for a moment longer than we can avoid," he said.

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