ECONOMY

EU warns China on textiles

BRUSSELS – The EU urged China yesterday to tame its textile exports or face formal curbs on products such as T-shirts and trousers, which have leapt in some cases by more than 500 percent since the end of a global quotas system. «Europe cannot stand by and simply watch these developments unfold. The time has come to take further action,» European Trade Commissioner Peter Mandelson said, announcing his plans for a probe into nine categories of Chinese textile and clothing products. His decision to recommend an investigation into the surge which followed the Jan. 1 winding up of a global quotas regime could lead to formal curbs on Chinese shipments by the 25 nation European Union within 150 days. Under the terms of its entry into the World Trade Organization (WTO) in 2001, Beijing agreed that members could cap imports of Chinese clothing and textiles at 7.5 percent above the level of shipments the previous year until 2008 – providing they demonstrate that their own firms are suffering. China made 17 percent of the world’s textiles and clothing in 2003, but the WTO sees that market share rising to above 50 percent within the coming three years. Mandelson said he wanted an investigation into sharp rises in imports from China of T-shirts, pullovers, men’s trousers, blouses, stockings and socks, women’s overcoats, brassieres, flax or ramie yarn and woven fabrics flax. Data provided by the European Commission, the EU’s executive arm, showed that the bloc’s member states imported 95.7 million T-shirts in the first three months of this year, a rise of 164 percent from the same period of 2004. Imports of pullovers and men’s trousers leapt by 534 percent and 413 percent respectively in the first quarter of 2005. Beijing imposed export tariffs on some textile products from Jan. 1 to counter fears that its exports would flood world markets and undermine producers both in poverty-stricken nations and advanced economies, including the United States and Europe. EU: China must do more But Mandelson said China should take further steps to avoid the imposition of so-called «safeguards» on its exports. «I urge China to take a fresh look at the measures they have put in place already and explore whether they cannot do more. I have also asked for concrete evidence that their measures are having an effect,» he said. Mandelson has resisted calls from the European textiles industry group EURATEX for safeguards to be imposed immediately. EURATEX argues that China’s cheap labor, state subsidies and copyright infringements make it impossible to compete, and says 1 million European jobs could be lost this year alone. Several EU member states, including France and Italy, have also put pressure on Mandelson over Chinese clothing imports. Alarm at the prospect of massive job losses in the sector has crept into France’s public debate on the EU constitution ahead of a crucial referendum next month. However, Mandelson said he was not interested in launching a trade battle. «If there are some interests in Europe who want to see some sort of trade war with China launched over this, then they are looking to the wrong person,» he said.