The European Commission said on Wednesday in Brussels that it hopes to reach an agreement with China on an alleged surge in Chinese exports of T-shirts and flax yarn by next Tuesday.

The European Union (EU) head office gave the green light to Trade Commissioner Peter Mandelson to continue informal talks with Chinese Vice Minister of Commerce Gao Hucheng until next Tuesday.

The EU would not launch formal consultations with China on the two categories of textile products if the two sides reached an agreement by that time, said Mandelson's spokesperson Claude Veron- Reville.

She told reporters that she believed a deal was possible before the deadline.

"The EU and China had a constructive negotiation on this issue Wednesday and the talks would go through the week if necessary," said Veron-Reville.

Earlier last week, Mandelson announced that the EU would launch formal consultations with China over T-shirts and flax yarn, a move that would allow it to impose import limits within 15 days of the formal start of negotiations if China fails to curb its exports.

Meanwhile, there are seven other categories of textile imports from China currently under EU's investigation.

To ease the situation, China agreed last week to raise export tariffs on goods in 74 categories by as much as five times.

But China says it will scrap recently agreed plans to increase export tariffs on textiles should the EU and US impose quotas on imports.

"If the US and the EU formally carry out restrictions on any of these categories, we will not impose tariffs on the items in question," the Chinese Commerce Ministry said.

Under the rules of the World Trade Organization, all quantitative quotes on textile products should be lifted by Jan. 1, 2005.

Source: Xinhua