BRUSSELS/PARIS, Sept 7 - EU states backed a plan on Wednesday to free up blocked Chinese textile imports but Denmark slammed the deal as out of touch with modern trade, a sign of how deep divisions remain over Europe's response to Asian competition. Reuters reported.

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EU Trade Commissioner Peter Mandelson (L) and China's Commerce Minister Bo Xilai pause during their joint press conference, after signing a China-EU textile agreement in Beijing September 5, 2005. [Reuters]

European Trade Commissioner Peter Mandelson -- who has been buffeted by the rival interests of Europe's textileproducers and retailers -- praised the "solidarity" of member states and said he expected the goods would begin to be released next week.

Tens of millions of Chinese-made trousers, bras, jumpers and other clothes have been prevented from entering the EU after import quotas began filling up, just weeks after they were announced in June.

The new quotas were an attempt to slow huge growth of Chinese textile imports to Europe this year, after a previous quota system expired on January 1.

Under an agreement this week between Brussels and Beijing, the European Union and China will share the impact of allowing the blocked goods into the region, with the Chinese government accepting lower export quotas for 2006.

That was a key demand of European countries with their own textile industries, like France, Italy and Spain.

Countries with strong retail sectors like Germany and the Nordics had pressed Brussels to release the goods.

The prime minister of Denmark -- which was among the countries pushing for the quotas to be lifted -- on Wednesday criticised the revised China deal.

"I believe that the agreement to limit Chinese textile exports to the EU does not take into account the realities of modern international commerce," Anders Fogh Rasmussen told an economic convention in Paris.

"This example of protectionism takes place in an area where companies have had 10 years to prepare for the competition from China. Such protectionism is bad policy for Europe," he said.

NEW TENSIONS?

Trade experts in Brussels say tensions could rise again in coming months, just as the European Commission prepares for a meeting of the World Trade Organisation in Hong Kong in December which will seek to further unshackle global commerce.

The EU has launched investigations into whether several categories of shoes imported from China are being dumped on European markets, an issue which is sensitive for some of the countries that pushed for the new quotas for Chinese clothes.

"We are worried about possible incentives to get the support of producer countries (for the textiles deal)," said Alisdair Gray, a director of the British Retail Consortium, sayingretailers feared anti-dumping procedures might be accelerated.

In speeches earlier this week in China, Mandelson stressed he believed that "managing trade" with quota systems was not a long-term option but that he also had to "manage public pressures" from the member states he represents.

The European Commission spokeswoman said assurances had been given to EU member states that Chinese goods entering the region would be closely monitored, as sought by France in return for its support for the deal.

A diplomat said Germany was concerned that goods contracted months ago but not yet shipped to the EU might not able to enter the region under the agreement. German retailers had the largest number of such contracts outstanding, the diplomat said.

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