China: EU textile move could harm trade ties
(Agencies/chinadaily.com.cn)
Updated: 2005-04-26 14:53

China warned the European Union that bilateral trade relations are under threat from the EU's plans to impose limits on Chinese textile exports, reaffirming its strong opposition any such move.

"This decision is against the usual position of free trade, of the EU government and threatens the long-term stable development of the China-EU textile trade," commerce ministry spokesman Chong Quan said in a statement, published on its website on Monday.

A woman works at a textile mill on the outskirts Shenzhen in Guangdong Province in this undated file photo. China warned Tuesday that the European Union bilateral trade relations could be affected if the bloc goes ahead with plans to impose limits on Chinese textile exports, as it reaffirmed its opposition to the move. [AFP]

"We hope that the EU can acknowledge fully the negative influence on bilateral trade relations when it imposes limits on Chinese textile products.

"Both China and the EU should take responsibility to safeguard the stability of EU-China trade," he said.

With billions of dollars of trade on the line, China's Commerce Minister Bo Xilai made clear Monday Beijing was "firmly opposed" to limits by other countries on its textile exports.

"China does not bear the main responsibility for the phenomenon of steep rises in the exports of Chinese textiles in certain markets," he said in Jakarta, according to the China News Service.

He attributed the rise to protectionist measures taken during the 10 years before textile trade quotas were lifted worldwide on January 1 this year.

The comments came after the European Commission said Monday it expected to receive a formal request from EU member states for emergency measures leading to a fast-track application of limits on Chinese imports. The EU said it plans impose limits on nine kinds of Chinese textile exports, including sweaters, trousers and shirts.

So far the European Commission is only considering a lengthy investigation and consultation process on textile imports, which would be the first step towards imposing on limits.

It follows Brussels receiving data showing Chinese textile exports to the EU have risen by as much as 534 percent for some garments since the end of the 31-year-old global quota system.

The expiry of the system has left producers in developed and developing countries dealing with a wave of imports from China, whose manufacturers benefit from cheap labor and huge economies of scale.

As well as the EU, China is also dealing with a groundswell of protectionist measures in the United States, where the garment industry has demanded government action to curb 14 types of apparel exported from China.

However, if Europe, or the United States, decides to take the fast-track to limits, it runs the risk of China challenging the action at the World Trade Organisation in what would be unknown legal territory.

While the commerce ministry's Chong made no direct threat of this, he made clear moves towards imposing limits was against the principles of the WTO.

"This decision is against the principles of the WTO, it is also against the relevant articles in the report when China entered the WTO (in 2001)," he said.

WTO director general Supachai Panitchpakdi has counseled caution to countries struggling against the surge in Chinese textile exports, advising them to wait at least a year before taking any protectionist steps.

Chong urged the EU to consider the positive measures China, the world's largest exporter of clothing with 28 percent of the market, has taken to globalise the textile trade before making any rash moves.

"The EU should also consider the positive measures China has taken to promote the smooth transition to the globalisation of the textile trade and also to promote EU-China cooperation," he said.

"We hope it will also consider the interests of both sides, especially the interests of European consumers and avoid using arbitrary limit measures.

"We hope it will avoid influencing the bilateral trade situation by unilateral acts."

China has presented its comments to the EU and hoped to carry out informal discussions over the conflict, Chong added.

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