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EU early warning for Chinese
textile tsunami
By Stefania
Bianchi
BRUSSELS - The European Union has
unveiled an "early warning system" to monitor
import of China's surging textiles and clothing,
and to impose safeguards if it reaches "danger
zones".
"China, and its dramatic
potential to increase exports following the lifting
of quotas from January 1 this year, has become a
key concern for a number of European Union
member states and European textiles producers," EU
Trade Commissioner Peter Mandelson told reporters
on Wednesday. "My aim is to ensure a
smooth transition to a post-quota world without
incurring avoidable damage to our industry and
vulnerable developing countries. The guidelines recognize
the legitimate concerns of member-state governments
and the textile sector, while allowing China to
benefit from the lifting of quotas. They equip us
to make a swift and effective response."
Under the guidelines, the European
Commission can limit textile and clothing imports
if they rise anywhere between 10% and 100% of 2004
levels. Under World Trade Organization (WTO)
rules, China's trade partners can limit imports
until 2008 if they can prove that the China
imports are disrupting the market. "If these
danger zones are reached, the commission will
launch an investigation and hold informal
consultations with the Chinese," Mandelson said.
"On the basis of the consultations, we will be
able to decide whether to go further to impose
formal safeguard measures."
China currently
has a 20% share of global textile exports.
Mandelson predicts that this could rise to
50% over the next five years. This is likely to hurt
producers in developing countries such as Bangladesh
and Sri Lanka, which have traditionally benefited
from the quota system. "The time has now come
to limit the seemingly voracious appetite of Chinese
exporters for the European market," Bill Lakin,
director general of the European textile
association Euratex, said last month.
But
Mandelson stressed that no immediate action is
planned. "We only have two full months of data,"
he said. "It is too early therefore to judge what
sort of difference in trade flows and what likely
market disruption is going to arise." He said the
safeguards should be the last resort.
Some
development groups say the European Commission
measures could threaten China's progress in
poverty reduction. "European industry had more
than a decade to prepare for the end of quotas,"
said Phil Bloomer, head of Oxfam's Make Trade Fair
Campaign. "They decided not to. China should not
be penalized because Europe maintained most of the
quotas until the last minute instead of having a
managed phase-out."
Oxfam says that
although the Chinese economy has grown quickly
over the past 20 years, its average income is
still only 4% of that of France, and there are
more than 100 million people living in absolute
poverty. "The EU says it is committed to ensuring
that the current WTO trade negotiations benefit
development but any increase now in European
protectionism against China and other poor
countries' exports will give the lie to this
claim, and risk paralyzing the talks," said
Bloomer.
Oxfam says it is concerned about
the poor working conditions in Chinese factories.
"But this is no justification for blocking Chinese
clothing exports, which would hurt poor workers,
particularly the millions of women employed in
this sector," Bloomer said.
The move by
the EU is expected to raise the hackles of China's
textile manufacturers, who are already fuming at
the United States's attempts to impose new quotas
on textile imports from China. The US government
took the first step on Tuesday toward restricting
imports by initiating an investigation into
imports of low-priced trousers, shirts and
underwear from China in response to pressure from
its textile industry.
"The move by the US
violates the basic principle of free trade," said
Wang Shenyang, chairman of the China Chamber of
Commerce for the Import and Export of Textiles,
adding that his department would appeal to the
government to initiate reprisals if the US insists
on curbing China's textile exports in this way.
Although statistics from customs show that China's
exports to the US increased greatly in the first
quarter of this year, Wang said it only meant that
trade had been seriously limited by quotas
earlier.
"It will take time for textile
trade to come back to normal because it had been
depressed by quotas for a long time," he said.
"The US government cannot justify its protective
measures with statistics from just three months.
WTO members had set a grace period for the quota
removal. During the past 10 years, the US just
managed to tailor exports from its trade partners
instead of adjusting its domestic textile industry
to adapt to the international trade."
(Inter Press Service/Asia
Pulse/XIC) |
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