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EU: Trade Chief Announces Moves To Unblock Chinese Textile Imports

Responding to deepening unease among textile retailers, EU External Trade Commissioner Peter Mandelson today said he is preparing to release the millions of Chinese sweaters, trousers, t-shirts and other items of clothing piling up at EU ports. More than 80 million individual items are reportedly being blocked by EU customs authorities, as quotas agreed between China and the EU for this year are already full.

Brussels, 2 August 2005 (RFE/RL) -- Most observers consider Mandelson's announcement of moves to start releasing Chinese textile goods impounded by EU customs authorities long overdue.

Since ceilings on Chinese textile imports were reintroduced on 12 July, the quotas for almost all of the 10 categories covered are now full.

In numerical terms, this means more than 80 million t-shirts, pullovers, pairs of trousers, underwear, etc., today collectively languish in customs warehouses across the EU. They are all in excess of quotas that are supposed to run until 31 December but have already been filled.

Today, Mandelson said this is hurting EU clothing retailers.

"I cannot accept that EU retail businesses should be penalized unfairly by the introduction of the agreement we made with China," Mandelson said. "I have therefore set in motion procedures to unblock the goods that have been caught in the ways I have described. Last week, member states called for this action to be taken urgently."

The overflow of Chinese textiles into the EU came as the result of a lifting of the quotas at the beginning of this year as part of a global deal to liberalize textile trade. China emerged as the best placed among developing nations to take advantage of free trade with the EU.

The EU's own textile producers and member state governments appeared unprepared when Chinese manufacturers seized the opportunity to dramatically increase their production and exports.
During a one-month delay in enacting the new curbs, EU retailers went on ordering goods from China.

Under pressure from clothing manufacturers in France, Portugal, Spain, and Italy, the EU reintroduced its import quotas again on 12 July. But, as Mandelson said today, during a one-month delay in enacting the new curbs, EU retailers went on ordering goods from China. Their orders exceeded the quotas for 2005, but Mandelson stressed the retailers cannot be blamed for "beating the system."

Mandelson did not disclose how he intends to finally resolve the legal problems created by the over-quota orders. He said he would make detailed proposals to the rest of the European Commission today.

The "Financial Times" suggested that Mandelson is looking at three main options -- save for some shipments from quotas on the grounds they were ordered in good faith before the system came fully into force; shift items from overfilled quotas into less popular categories; and deduct some goods from China's quotas for next year.

An EU delegation is currently in Beijing. Its ongoing talks with Chinese authorities have so far proved unsuccessful.

Mandelson's move needs the approval of EU member states. The EU's own textile producers, mostly southern EU states, can be expected to object. Mandelson did today drop a strong hint they could be overruled, saying only a "qualified majority," not unanimity was required for a decision.

Mandelson made clear today, however, that restrictions on Chinese textile imports are here to stay. What is needed, he said, are improvements in the implementation of the system.