Topic: D - Goods - Clothing and Textiles
Author: Business Day
Published: 15/03/2005
Region: China
United Kingdom
United States
As a result of quotas no longer regulating the global apparel trade, Chinese textile exports to the US jumped 65 percent in January, while exports to Germany, the European Union's (EU's) biggest buyer of Chinese textiles, rose by 46 percent. Consequently, Brussels and Washington are mooting the possibility of "safeguard" mechanisms, which under World Trade Organisation (WTO) rules would allow limits to be set on specific Chinese goods.
The 1974 Multi-Fibre Arrangement ended on 1 January 2005 and analysts predicted a sharp upswing in textile exports from powerhouses China and India at the expense of smaller producers in developing countries such as Bangladesh, Cambodia and Vietnam. However, potential job losses in the US have caused US textile and clothing makers to call for action by Washington to stem Chinese imports. Auggie Tantillo, the executive director of the American Manufacturing Trade Action Coalition, said that if this trend continues, China will have a monopoly of the US market. Concerns have also been voiced to the EU, and European industry group, Euratex, has called on the EU to impose curbs.
Spokesmen from both the EU and the US say they will negotiate with China first, as safeguard restrictions were seen only as a last resort. They would prefer Beijing to agree to moderate Chinese exports.
Sun Huaibin, spokesman for the China National Textile Council, said that it did not make sense to remove restrictions because free trade was desirable and then "implement new quotas just months after lifting them". He added that China's products were competitive on global markets as they offered good value, and should continue to enjoy access to markets under WTO rules.
Sun explained that China needed to create jobs for its 1,3-billion people, and wanted to preclude destabilising surges in Chinese exports. Measures, such as a recently implemented export tax and new regulations on issuing export permits, had therefore been taken. Chinese Prime Minister, Wen Jiabao, addressing parliament earlier in March, apparently recognised US and EU concerns when he set China's total export growth target for this year at 15 percent.
Source: Business Day
