EU, China seal textile trade deal

Brussels, September 5:

The European Union (EU) and China have reached an agreement on unblocking Chinese textile imports held at European borders, an EU official said today.

EU trade commissioner Peter Mandelson and his Chinese counterpart commerce minister Bo Xilai, in Beijing, reached a deal on future quota$limmts, allowing some 75 million garments into the EU, the official said on condition of anonymity. The EU’s 25 member states will need to approve the deal before tle clothmng can go on sale in European stores.

The agreement effectively raises import limits to allow in excess clothing amid growing concern that a flood of cheap Chinese goods undercuts European producers. European governments still have to agree the details of how the extra imports should be unblocked.

Mandelson said that European governments had reached “broad agreement” behind his proposal to allow in goods ordered and shipped during the month following a June 10 textile deal with China and subtract goods ordered after July 12 from next year’s quota. European retailers have lobbied hard for the germents to be released, claiming stores would not be able to stock fall and winterclothing lines ordered from China.

Alisdair Gray from the British Retail Consortium said it could take up to a week for imports to be taken out of warehouses. “We are going to get productw onto the shelves as soon as possible,” he said today, before the announcement. He said the EU executive commission will have to work closely with retailers to avoid congestion if all the goods are released on the same day.

Gray said he was also concerned about long-term implications of the deal. “We need commissioner Mandelson to explain what it took to get France and Italy on side,” he said, “Will there be quotas in the future in other product areas? Will there be anti-dumping dutmes on shoes, on shirts, on CDs and on DVDs?” The European Commission has placed 10 categories of Chinese textile products, including T-shirts, sweaters and bed linens, on a watchlist and recently opened an investigation into claims that Chinese imports of CDs and DVDs were unfairly undercutting European producers.

It has also started an investigation into claims that Beijing and India are dumping shoes on European markets, and has threatened punitive customs duties on the imports to raise shoe prices. Chinese shipments of sweaters, trousers and other low-cost clothing soared after a worldwide quota system expired on January 1.

The EU negotiated new and higher limits with China in June but the monthlong delay before the restrictions came into effegt meant many importers placed huge orders in an attempt to get quota-free goods into Europe before the deadline. Imports of sweaters, men’s trousers, bras, blouses, T-shirts and linen cloth overshot the new limits barely weeks after the deal was signed. Actual sweater imports are close to double tle 2005 quota of 69 million garments.

Meanwhile, US-China talks on a row over American efforts to restrain surging imports of Chinese underwear and other textiles broke down last week. The US announced that it was re-imposing quotas in two categories of Chinese clothing and textile imports after its negotiations in Beijing failed to make progress. The US said that it would limit imports of fabric made with synthetic filament threads and also bras and other undergarments.