EU trade commissioner Peter Mandelson is resisting pressure from the French, Italian and Spanish governments to extend the two-year cap on textile imports from China, due to expire at the end of this year.

But he called on China to show restraint and said it must also show more willingness to open up its own markets.

The EU imposed a 12.5% cap on 10 key categories of clothing in the wake of the "bra wars" controversy two years ago, and the growth in the value of Chinese exports has slowed sharply as a result.

China exported US$57.4bn worth of textile products across all markets in the first five months of this year - an increase of 15.5%, but nine percentage points lower than the growth rate in the same period last year.

China¡¯s National Development and Reform Commission said last week that it expected the trend to continue, and full-year exports would be 16% higher, compared with more than 25% in 2006.

The commission attributed the slowdown in growth not just to US and European trade barriers, but to the ongoing appreciation of the yuan and China¡¯s recent lowering of its export tax rebate from 13% to 11%.

France called for quotas to be extended and President Sarkozy argued that the yuan should be revalued to bring the price of Chinese goods closer into line with those of competitors.

Mandelson instead focused on "technical barriers", relating to licensing and testing, which he claimed were blocking €20bn worth of potential European exports to China per year.