EU may curb Chinese textile imports

The EU could impose limits on cheap Chinese textile and clothing imports if an investigation into the increased amounts of Chinese goods making their way to the continent reveals the European market is being disrupted.

    Trade limits: Protectionism or sound policy decision?

    Insisting he was not seeking to start a trade war with China, EU trade chief Peter Mandelson said on Sunday he would investigate nine categories of clothing and textiles, including T-shirts, pullovers and women's overcoats.

    The probe was deemed necessary because statistics from the first four months of this year showed there "was cause for serious concern. Time has come for further action", Mandelson said.

    "If necessary and justified I will propose safeguard measures," he said, describing the situation as "dramatic".

    At the end of the investigation, a formal three-month consultation process will be launched at the World Trade Organisation unless China voluntarily imposes restrictive measures, he said.

    The EU trade commissioner said such action would give Europe's battered textile industry "breathing space" to restructure and become more competitive.

    "I do not offer permanent protection," he said, warning that he would not back EU hardliners calling for a trade war with Beijing.

    Imports jump

    Mandelson said the EU's so-called alert thresholds had been exceeded in all categories, which include men's pants, blouses, stockings and socks, brassieres and textile items such as woven fabrics flax and ramie yarn.

    The European Commission said increases in the volume of imports ranged from between 51% to 534% since the start of the year, adding that this more than justified a wider investigation.

    Mandelson (R) said he might bring
    the textile issue up at the WTO

    "You can see the scale of the problem and the sharpness of certain import levels," Mandelson said, adding that he was to contact officials in Beijing on whether they would voluntarily cut back on exports.

    He said he would be travelling to Hong Kong on Monday on a trade mission, and would also discuss the issue there.

    He cited statistics showing that T-shirt imports from China saw a 164% increase in the first three months of this year compared to the same period last year.

    The increase caused a 26% drop in T-shirt prices in the EU, Mandelson said - good news for consumers, but disastrous for Europe's own clothing and textile sector.

    Chinese response

    Chinese Prime minister  Wen Jiabao on Thursday defended his country's surging textile exports, saying the increase was due to changes in international trade rules and that Beijing has imposed its own measures to control the boom.

    The US is also considering new limits on Chinese textiles, after Beijing's exports soared when worldwide quotas were lifted on 1 January.

    Wen said when the quotas were lifted, Chinese authorities instituted textile taxes and other measures to limit exports and stay within WTO rules.

    And not all the 25 EU nations are united on the question.  While textile producers such as Portugal, France and Italy are particularly worried about Chinese imports, others are concerned about the impact of quotas on European retailers, with Sweden in particular warning against protectionism.

    A clause of China's 2001 entry agreement into the WTO allows other member states to use safeguards to protect against sudden and sustained surges in textile exports.

    SOURCE: Agencies


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