Compared with the 15-year-long negotiation on China's entry into the WTO, the consultation over the China-EU textile dispute held on June 10 was a much shorter one. However, during about ten hours the tense negotiation enabled China and the EU to reach a consensus that averts a further escalation of the trade friction. It also made a breakthrough in the "textile entrenchment" around China.

This is a dispute that could have been avoided in the first place. In light of the bilateral economic and trade relations, textile trade is, after all, a small issue which has been blown out of proportion by some countries. No matter how high the US and the EU might raise their sticks when setting quotas, textiles account for only 6 percent and 7 percent of the Sino-US and Sino-EU bilateral trade. To sacrifice bigger businesses for one of such small proportion is not worth the candle. In 2004 China exported no more than $10 billion-odd worth of textiles to the US while China's import of US farm produce alone reached $7.7 billion, with China being the largest buyer of US cotton and soy beans. If China's textiles encounter obstacles in the US to whom would the Americans sell their cotton? To say nothing of the acknowledgement by the US Fed Chief Greenspan that even if Chinese textiles exited from the US and the EU the two would have to let other countries to fill the blank since they do not make products of the same kinds. So it won't change their trade imbalance.

On the other hand, the textile dispute is a major issue from the industry's perspective, which has been deliberately disregarded by some countries. As a strong labor-intensive industry that has formed over the years experiencing many readjustments, the textile industry accounts directly for employment of 19 million Chinese and indirectly for employment of hundreds of million Chinese. The US and the EU's quota on each textile type puts a thousand Chinese businesses directly in jeopardy. One day spent on resolving the trade dispute may force numerous factories out of business and thousands of Chinese workers out of employ.

The global economy is becoming increasingly integrated and the US and the EU are deeply involved in China's development. Any negative impact on the Chinese society and economy will eventually be felt overseas by the world.

There is no hiding the fact that free trade and protectionism are closely associated, form a sharp contrast and interact as both cause and effect. The word "trade" itself is two-way in nature. It is both import and export, both win and loss. What matters is how "free" it can be and to which extent one can "protect" oneself.

Liberalization of the textile trade is something China got during the WTO entry negotiations at the cost of opening farm produce, service trade and other markets. Ironically, while the opening up provides developed countries with numerous "bread baskets" China does not get the returns it deserves. China discharges obligations only to find that it has lost its rights. On the global textile stage in 2005 China becomes nearly the only one implementing free trade, while those countries holding high the "free trade" banner in the past are joining each other to oppose free trade with words and deeds. Is it true that in the international trade the one who abides by the rules must be driven to a corner by the one who departs from them?

As a matter of fact, different roles have already been allocated to developed and developing countries. The former takes up the fat lands of the middle and high-end markets while the latter laboring on the low and some middle-end lands. The world trade can never be carried out among a few countries. A balanced and harmonious joint development is possible only if we each have work to do to make the cake bigger. Those who can make Boeings and Airbuses must not fixate on socks and pants.

Chinese Commerce Minister Bo Xilai once did a calculation. Due to large amounts of OEM (Original Equipment Manufacturer) orders each shirt exported by China brings back only 30 to 40 cents of profit while the EU and the US investors, importers and retailers take away more than 90 percent of the textile trade profits. What reasons can they offer to justify blaming and setting quotas on the one who takes less than 10 percent of profits?

The greatest demonstration significance of this consensus is that everything can be talked over be it small issues or big issues. It is an alternative preferable to setting unilateral limits and barriers. One must base making profits on mutually beneficial business. The determination needed to make a concession requires sincerity to have dialogue. No discord, no concord. Whether it is possible to turn discord into concord hinges on one's weighing and judgment. From this point of view, the EU is more practical and wiser than the US, although Peter Mandelson looks much younger than Carlos Gutierrez.

This is an article carried on the fifth page of People's Daily on June 13 and translated by People's Daily Online