GUANGZHOU, 04/20 - Cao Xiaojian turned his textile company from the brink of disaster after last year`s trade disputes between China, the European Union and the United States, but he believes many problems still lie ahead.

He worries about what he perceives as a stubborn protectionist mindset as seen in the EU`s recent sanctions against China-made footwear.

Cao is the vice-president of the Jiangsu Shuntian Co., Ltd., the largest Chinese textile enterprise in east China`s Jiangsu Province. His concern for the future of the international textile trade after 2008 is typical among Chinese textiles manufacturers, although a textiles truce is in place as the Sino-EU and Sino-U.S. trade accords are being implemented.

"The bilateral trade agreements will end in 2008. After that, the EU and the U.S. will probably take anti-dumping measures against Chinese textile products," Cao said at an international trade fair in Guangzhou, capital of south China`s Guangdong Province.

The Chinese Export Commodity Fair, a biannual event launched in 1957, consists of two phases: manufactured goods, textiles and garments, foodstuffs and medicines in the first phase that is scheduled from April 15 to 20; and souvenirs, gifts and household commodities in the second, from April 25 to 30.

According to last year`s Sino-EU and Sino-U.S. trade accords, the growth rate in Chinese textiles exports to the European Union was restricted to a range of eight to 12.5 percent, and to the United States, at 10 to 17 percent, up to the end of 2008.

The fair, China`s leading platform for trade of export commodities, was attended by a record number of buyers from Europe and the United States, signifying that the bilateral trade accords were imposing a relatively peaceful trade environment for the time being.

Cao Xinyu, vice-president of the China Textiles Import and Export Council, said exports of China-made textiles and garments to the EU slowed to 3.6 percent while exports to the U.S. actually shrank by two percent in the first two months of this year. In comparison, exports to the two markets were up by 30 percent for the same period last year.

Cao said, "It is expected that China`s foreign sales of textile products will enter a stable development stage in the next couple of years."

Nonetheless, most Chinese enterprises believe that after 2008, when the accords expire, the European and American markets will take steps to restrict, at any excuse, China`s exports of textiles.

"Anti-dumping and other safeguard measures will possibly be taken against Chinese textiles exports on the EU and U.S. markets after 2008,"said Xu Jiuyin, chairman of the Cotton Knitwear Import and Export Co., Ltd. under the Jiangsu Huihong International Group.

Xu based his prediction on what he sees as the escalating protectionism in the EU and the U.S., marked by the EU`s recent levying of anti-dumping duties on China-made footwear and color TV sets.

"The anti-dumping verdicts were of political significance. This made us worry that Chinese textiles would face a similar situation," Xu said.

Auggie Tantillo, chairman of the American Manufacturing Trade Action Coalition, has said he would continue to monitor China`s exports and would file an application for special safeguard measures against Chinese textile products if he sensed an impending threat to the American textile industry.

If this is true, the situation will be the worst Chinese textile enterprises have seen, industry insiders believe.

Cao Xiaojian believes the first anti-dumping measures would be directed at sensitive articles such as men`s overcoats, trousers and shirts.