"I am happy with the state of talks between the EU and China," Mandelson told reporters after a visit to the World Trade Organisation (WTO).

He did not give details of the discussions.

On May 27, the EU requested formal WTO talks with China on the issue, citing figures showing a big jump in Chinese imports of T-shirts and flax yarn into the EU following the end of a global textile quota system on January 1.

The EU request followed a similar move by the United States.

Under the rules on China's accession to the WTO more than three years ago, a request for talks enables Beijing's trading partners to place a temporary cap on textile imports, if China does not first take its own voluntary measures within 15 days.

The EU and US moves have met with anger from China, which accuses Washington and Brussels of ill-disguised protectionism.

China has complained that the EU and US knew that a four-decade-old textile quota system would end this year, under a 1995 agreement, and should have been prepared.

The Asian economic giant has charged that the EU lacked evidence to justify its complaint about Chinese imports -- a claim Brussels has rejected.

In an about-turn from a more conciliatory position, China said Monday it was scrapping export tariffs on a range of textile goods from June 1 and would also revoke a decision on May 20 to raise export taxes on 74 textile and clothing products.