EU guide on textiles 'violates WTO rule'
By Dai Yan (China Daily)
Updated: 2005-04-08 06:36

The European Union's new measure against Chinese textile exports violates fundamental World Trade Organization rules and is a potential blow to the global textile trade, said the Chinese Government and local industry insiders yesterday.

The European Commission on Wednesday unveiled "alert levels" on how far Chinese textile imports can increase before the commission considers emergency barriers to protect its domestic industry.

A workers works in a textile mill in Liaocheng, Shandong Province April 6, 2005. China says the European Union's measures against Chinese textile exports violate the WTO rules and would deal a potential blow to the global textile trade. [newsphoto]

Its guidelines say that if Chinese exports rise 10 per cent above 2004 levels then an EU investigation would be triggered as well as informal talks with China on possible protection measures.

"This departs from the spirit of free trade proposed by the European Union," said Chong Quan, spokesman of the Ministry of Commerce.

He said the guidelines could make bilateral textile trade less stable.

As a responsible member of the WTO, China has taken a series of positive steps to ensure a smooth transition into the free-quota period, Chong said.

The European Commission adopted the guidelines on textile imports from China in response to EU manufacturers' concerns over a potential influx of cheap Chinese clothing since the elimination of quotas on January 1.

But China has taken several initiatives to control the growth of exports, including imposing textile import and export levies.

Chong said the European Union should be considerate of China's efforts and deal with any potential problems in a cautious manner.

China does not wish to see bilateral trade affected by unilateral action, he said.

Chinese textile companies, shocked by the EU's decision, questioned the reasoning behind the 10 per cent threshold.

Lin Bin, a manager from Linda Garment Company in Shandong Province, said such a parameter could easily be breached, meaning the EU could launch an investigation at any time.

"I do not know why it is 10 per cent. Do they (the EU) have any studies to back it up?" he said.

Wang Shenyang, chairman of the China Chamber of Commerce for the Import & Export of Textiles, said the EU set the rate just so it could launch investigations, without any consideration for other factors.

The Chamber of Commerce represents 6,000 textile companies in China.

"The European Commission always claims the safeguard measure is a last resort, but we do not get that impression from these guidelines," he said.

Wang believed the guidelines enable the EU to impose safeguard measures at will.

He said 46 companies from Germany, the Netherlands, Austria and the Czech Republic had just completed tours of the country and had sealed many deals with Chinese textile firms.

US moves

Chong Quan also yesterday called recent US moves against Chinese textiles a bad precedent in global trade.

The United States said on Monday it had started looking into whether quotas should be re-imposed on three categories of Chinese textile and apparel exports.

Chong said the US Government initiated the move on preliminary data, rather than waiting for accurate figures to be released.

(China Daily 04/08/2005 page1)

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