The European Union said its economy is likely to suffer from the quotas imposed by the US on some Chinese clothing goods in an attempt to fight trading deficit.

China’s reaction to the quotas was rapid with the statements showing anger at the restrictions that were uncurbed in January.

China said that the move severely jeopardizes «multi-lateral trade system» and opposes the principles of the World Trade Organization. “It has badly damaged the interests of Chinese enterprises and also the confidence of Chinese companies and public in the international trade environment following China’s entry into the WTO,” said Commerce Ministry spokesman Chong Quan.

The US announced new quotas for Chinese exports to the US of cotton trousers, cotton knit shirts and underwear on Friday. The move is likely to have impact on the EU economy that claims Chinese clothing will rush to the countries that share euro and damage the economy that is trying to pave the way to recovery.

The measure “demonstrates the administration’s commitment to leveling the playing field for US industry by enforcing our trade agreement,” said US commerce secretary Carlos Gutierrez.

The US said that Chinese cotton trousers exports to the US grew 1.505 % in the first four months of 2005, while cotton shirts rose 1.346%.

Chinese textile exports are blamed for a 16,600 job-loss in the US industry in 2004. Washington is considering the possibility of formal talks with Beijing on the issue.