The European Union (EU) on Friday asked the Chinese authorities for formal consultations on two categories of textiles and clothing products -- flax yarn and T- shirts.

The EU's move would trigger an urgency procedure, which requires China to limit exports of textile or textile products in these categories to a level no greater than 7.5 percent above the amount that entered the EU market during the period from March 2004 to February 2005.

"European Commission guidelines invite China to do this within 15 days. However, a mutually satisfactory agreement between the EU and China could also be concluded through negotiation during this period," the EU executive European Commission said in a statement.

"The Chinese Government perfectly understands that this procedural step does not preclude or displace the intensive discussions between China and the EU," the statement said.

The Commission said the request is made after a thorough and fruitful telephone discussion between EU Trade Commissioner Peter Mandelson and Chinese Commerce Minister Bo Xilai.

"This will be followed by further contacts on Monday and in the coming week, when discussions can be expected to intensify at technical and political levels," it said.

The EU and China have already been in close, high-level contact recently to try to find a solution. On Wednesday, the EU head office gave green light to Mandelson to continue informal talks with Chinese authorities until May 31.

Earlier last week, Mandelson announced that he would request the EU to launch formal consultations with China over T-shirts and flax yarn. Meanwhile, there are seven other categories of textile imports from China currently under the EU's investigation.

To ease the situation, China agreed on May 20 to raise export tariffs on goods in 74 categories by as much as five times.

However, China says that it will scrap recently agreed plans to increase export tariffs on textiles should the EU and the United States also impose quotas on imports.

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

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

Source: Xinhua