Brussels, 12/06/2007 (Agence Europe) - Peter Mandelson had promised to be perfectly frank when telling his Chinese counterpart, Bo Xilai, of the EU27's concerns regarding the Union's ballooning deficit with China and China's non-compliance with its WTO market opening commitments. Greeting the Chinese trade minister in Brussels on Tuesday, the trade commissioner did not hesitate to tackle all the subjects that cause annoyance, in particular Chinese regulatory barriers and discrimination towards European exporters and investors and violation of intellectual property rights in China. “I thought the discussion we had was for the first time as frank, concentrated and prolonged a discussion as was necessary for such a serious topic as the growing trade deficit between the EU and China”, Mr Mandelson told the press after the meeting. He was mainly pleased that “for the first time at such a political level” there was “clear recognition by China … that something must be done” to reduce the Union's trade deficit with China that could amount to over €170 billion in 2007 compared to €128 billion last year. This deficit can partly be explained by China's persistence to set up trade barriers, essentially non-tariff and regulatory, mainly in the services sectors (telecommunications, construction, insurance and financial services). No solution was put forward by the two men on Tuesday but they agreed to work together to identify practical solutions for rebalancing the trade balance and presenting proposals on this question at the EU/China summit in November. Although he said he preferred “dialogue and cooperation to the dispute settlement mechanism” at the WTO for settling bilateral trade disputes, the trade commissioner nonetheless warned Beijing that “impatience and anger is going to rise and pressure is going to come on us here in the Commission to start to limit the access that Chinese producers have to our market”. He warned that European public opinion is not convinced that the Chinese authorities will bring in all the changes necessary, saying pressure will rise in the Commission for it to block Chinese imports. Mandelson did not, moreover, hesitate to denounce the lack of commitment on the part of the Chinese authorities when it came to counterfeiting. On steel, he gave his assurance that Europeans and Chinese will discuss at expert level, in June or July, action to strengthen measures taken by Beijing to slow down its exports to the Community market. On textiles, Messrs Mandelson and Bo agreed to find solutions to ensure “smooth transition” of the sector for after the temporary quota system that has restricted Chinese textile imports since 2005 and that is to expire end 2007. (eh)