The agreement was announced immediately after ten-hour-strong close-door talks between Chinese Commerce Minister Bo Xilai and the visiting EU Trade Commissioner Peter Mandelson, marking a substantive move to unravel rows between the two sides over Chinese textile exports.

"Both sides were very frank in the conversation and conferred about technical specifics in settling the dispute," commented the media-savvy Bo at an interim break of the lengthy talks in response to a media question.

The two sides agreed to stage a "smooth transition" before completely opening the EU market to Chinese textile exports in 2008, said Mandelson at a press conference held immediately after the talks.

"To seek settlement of differences through dialogue, rather than posing trade barriers, conforms to the interests of China and EU," said Guo Furong, a spokesman with Shanghai Oriental International, a leading trader of textile products in Shanghai, while commenting on the China-EU agreement late on Friday.

The European Union announced in May to take safeguard measures against some Chinese textile imports, claiming textile imports from China have substantially increased after the elimination of global quota on Jan. 1, 2005.

Upon its accession into the World Trade Organization (WTO) in 2001, China agreed to let WTO members impose limits on Chinese textile products if a sudden rise in Chinese imports disrupt the local markets. However, China has been seeking to avoid such circumstances through voluntary actions and consultations.

In order to curb the Chinese textile exports from soaring exceedingly after the global quota system ended at the start of this year, China, on Jan. 1, began to impose export tariffs between two and four percent on 148 categories of textile and clothing products including jackets and skirts. Export tax rebate rates were also cut to serve the same purpose.

Latest statistics show that China's apparel exports in the first four months this year rose 15.6 percent over the same period last year to 19.27 billion US dollars, significantly lower than the country's 34 percent year-on-year growth in overall foreign trade during the same period, showcasing a gradually emerging effects of the above measures.

Echoing China's consistent favor of dialogue and EU's noticeable sincerity in settling the trade dispute, the two sides vowed in the newly reached agreement to iron out future textile disputes through "timely consultation" and avoid any "one-sided action and trade conflict".

"Trade relations should be fair, balanced, reasonable and well-regulated," said Ning Jinyun, general manager of Tianjin Textile Group Import and Export Inc., while commenting on the cynosural talks between China and EU.

"WTO rules and the spirit of free trade should be firmly upheld," said Ning, head of a company, reporting exports valuing at 200 million US dollars annually, during an exclusive interview with Xinhua in north China's Tianjin Municipality Friday night.

Bo also defended China's right to a free textile trade in Shanghai early Saturday and said the rights were fully justified, just as similar rights in the service trade and agricultural sector as having been made clear upon China's WTO entry.

In a recent encounter with Mandelson in Paris, Bo said that limitations on Chinese textile products would not only harm China's interests but also damage the interests of EU importers, retailers and consumers.

Luckily enough, although the China-EU trade disputes have aroused much stirs on both sides, China and EU have demonstrated much sincerity in preventing the rows from escalating into "trade wars".

As a firm advocate of free trade, Mandelson recently rejected are turn to the quota system for textiles, saying the policy is based on the need to "manage change and adjustment, rather than to manage trade" -- preferably through a negotiated agreement.

"We should be fair to China while creating a much-needed breathing space for European industry and offering some relief to developing countries' textile exports to Europe," said Mandelson in Brussels before leaving for Friday's talks, eyeing a "settlement that helps everyone's interests".

China-EU economic and trade cooperation has greatly expanded over the past three decades. Last year, bilateral trade volume reached 177.3 billion US dollars, 74 times that of 30 years ago. The EU has surpassed the United States to become China's largest trade partner. China's textile exports to EU last year valued at 10.79 billion US dollars, six percent of the total trade volume.