EU Safeguard Investigation on China Textile Imports

The EU Commission has collected information on the trend of imports of certain textile products originating in the People's Republic of China (the PRC) through the import monitoring system. The data indicates that imports may threaten to impede the orderly development of trade.

The Commission has concluded that there is sufficient evidence to justify the initiation of an investigation in relation to the product categories concerned. The Commission has therefore decided to initiate an investigation to determine whether the application of textile specific safeguard measures in relation to those product categories is warranted.

Product Categories Concerned

Product Category

Description

2005 Q1 Growth Compared with 2004

4

Shirts, T-shirts, lightweight fine knit roll, polo or turtle necked jumpers and pullovers (other than of wool or fine animal hair

164%

5

Jerseys, pullovers, slip-overs, waistcoats, twinsets, cardigan, bed-jackets and jumpers (others than jackets and blazers), anoraks, wind-cheaters, waister jacket and the like, knitted or crocheted.

534%

6

Men’s or boys’ woven breeches, shorts other than swimwear and trousers (including slacks); women’s or girls’ woven trousers and slacks, of wool, of cotton or of man made fibres; lower parts of track suits with lining, others than category 16 or 29, of cotton or of man-made fibres.

413%

7

Women’s or girl’s blouses, shirts and shirt-blouses, whether or not knitted or crocheted, of wool, of cotton or man-made fibres.

186%

12

Panty-hose and tights, stockings, understockings, socks, anklesocks, sockettes and the like, knitted or crocheted, other than for babies, including stocking for varicose veins, other than products of category 70

183%

15

Women’s or girls’ woven overcoats, raincoats and other coats, cloaks and capes; jackets and blazers, of wool, of cotton or man-made textile fibres (other than parkas) (of category 21)

139%

31

Brassieres, woven, knitted or crocheted

63%

115

Flax or ramie yarn

51%

117

Woven fabrics of flax or of ramie

257%

The European Commission will now launch an investigation to justify possible safeguard measures, which could be introduced within 150 days. Peter Mandelson, EU commissioner for trade, says he expects to get the results of the probe about 60 days after its launch. Shortly after that, the EU could decide to impose ceilings on Chinese textile imports.

Sharp Increase of Chinese Imports

European textile industry groups, which claim that the jump in imports is costing tens of thousands of jobs, has been lobbying hard for immediate action. Euratex, the European textile association, cautiously welcomed the EU decision to open investigations into textile imports from China. "The announcement by the commission is to be viewed as a first clear signal that the European authorities do not intend to remain inactive in face of the unprecedented growth in volume of up to 543% in certain Chinese product exports to the EU at prices which have fallen by up to 47%," Filiep Libeert, Euratex president, said in a statement. EU Commission data showed member states imported 95.7 million T-shirts in the first three months of this year, a rise of 164% from the same period in 2004, while pullover and men's trouser imports jumped 534% and 413%, respectively.

Divided Views

EU member states remain divided over the issue. Thirteen of the 25 EU member states, including France, Italy, Spain, Portugal, Greece, and Belgium, have called on the EU to skip the five-month process and instead impose restrictions within weeks. The Commission responded that such action could trigger a trade dispute with China at the WTO, but added that they were closely monitoring trade in eleven additional textile categories.

WTO Director-General Supachai Panitchpakdi, on the other hand, has said that countries struggling with a surge in Chinese textile exports should wait at least a year before taking any protectionist measures. After only a few months of evidence, he suggested, the final impact of the trade rules remains unclear. “The textile industry has had 10 years to prepare for the lifting of the quota. We don't see any reason to introduce limits now,'' said Swedish State Secretary urging EU textile firms to be more competitive. Denmark, Finland, the Netherlands and Germany shared Sweden's position. 

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