China Angered by EU Textile Import Plan

The European Union had on Wednesday sought to soothe member states and industry concerns about surging Chinese textile imports, while being careful not to upset Beijing on the issues.

EU Trade Commissioner Peter Mandelson unveiled "alert levels" to consider limiting Chinese clothing imports but did not bow to pressure from the European textile industry to take more drastic action to hold back Chinese textiles.

The thresholds on such imports into Europe could trigger an investigation to determine if so-called "safeguards" are needed. However, the action plan does not take the EU, which is trying to build up strong commercial relations with China, as far and as fast down the road to safeguards as a US investigation into Chinese textiles, which has raised the ire of Beijing.

But on Thursday a Chinese commerce ministry spokesman made clear the EU move was unacceptable. "This departs from the spirit of free trade proposed by Europe and seriously violates the basic principles of the World Trade Organization," commerce ministry spokesman Chong Quan said in a statement on the ministry's website. "It will have a negative impact not just on Sino-European textile trade, but on overall global textile trade."

End of quotas

The EU and US actions reflect a world coming to terms with the end on Jan. 1 of a 31-year-old international textile import quota system. The expiry of the system has left producers in developed and developing countries bracing for a wave of imports from China, whose manufacturers benefit from cheap labor and huge economies of scale.

Reacting to the groundswell for protectionist measures in the West against its textile exports, China insists that it should not be penalized for having more competitive industries. "As a responsible member of the World Trade Organization (WTO), China has taken a series of active measures to ensure the smooth transition to an integrated textile market," said Chong.

"We hope the EU fully understands the efforts made by the Chinese in this respect and cautiously handles the issue. The overall trade relationship between China and the EU shouldn't be impacted by unilateral moves," he said.

According to the measures unveiled by the European Union Wednesday, the "alert levels" range from 10 to 100 percent growth over the 2004 trade volume, depending on the type of product.

"You can't use export growth as the only measure for so-called 'market disruption'," Sun Huaibin, a spokesman of the China National Textile Council, told the AFP news agency.

Sun said the measure was "worse than expected" and suggested it had no basis in global trade rules. "Following the end of the quotas, there is no legal basis for adopting this kind of even broader restrictive measure," he said.

US industry demands action

The US garment industry Wednesday demanded government action to curb 14 types of apparel exported from China as tensions over surging Chinese textile shipments escalated. The National Textile Association (NTA) said urgent measures were needed in addition to the US government's announcement this week that it has launched an investigation as a first step to slapping restrictions on the Chinese exports.

The NTA filed petitions with the government demanding the restoration of textile quotas that were scrapped globally on Jan. 1, claiming that textile and apparel imports from China had leapt by 63 percent since then.

The European textile association Euratex is lobbying hard to get Brussels to start investigating if safeguards are needed. Euratex was reluctant to comment on the EU measures before being able to study them in depth, but an official said that "we've been waiting since the end of the year (2004) for the guidelines as they have been published."

But British non-governmental organisation Oxfam hit out at the EU measures, which it said threatened China's reduction of poverty. "European industry had more than a decade to prepare for the end of quotas. 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," said Oxfam fair-trade campaigner Phil Bloomer.

Under the terms of China's accession to the World Trade Organisation, its trade partners can take action to limit Chinese textile imports during a transition period running until 2008 if they can prove that the imports are disrupting the market.