EU, China Agree To Curb Textile Imports

June 10, 2005
The European Union and China agreed on June 10 to curb a surge in imports of Chinese textiles into Europe until the end of 2008 in a bid to defuse an escalating row straining ties between the EU and Beijing.   EU Trade Commissioner Peter Mandelson ...

The European Union and China agreed on June 10 to curb a surge in imports of Chinese textiles into Europe until the end of 2008 in a bid to defuse an escalating row straining ties between the EU and Beijing. EU Trade Commissioner Peter Mandelson welcomed the accord, struck during late night talks with Chinese Commerce Minister Bo Xilai in Shanghai.

The accord aims to defuse a growing trade dispute triggered by the end of global textile quotas on January 1 which opened the floodgates to a surge of cheap Chinese goods into Europe. China had until the end of Friday to agree to curb growth in exports to the European Union of T-shirts and flax yarn to 7.5% a year or face temporary caps on the products.

The EU had requested formal talks at the World Trade Organization (WTO) with China on the issue, citing a huge jump in exports of Chinese T-shirts and flax yarn following the end of the textile quota system. Under the rules on China's WTO accession in 2001, a request for talks enables Beijing's trading partners to place a temporary cap on textile imports if China does not first take its own voluntary measures within 15 days. Although the European Commission had taken action only against T-shirts and flax yarn, it was seeking a blanket agreement covering other categories of textiles still being investigated.

Washington has already set limits on seven types of Chinese textile shipments. That dispute has also been fueled by concerns in the U.S. that China's currency is undervalued, giving it an unfair advantage on the global market. China has argued that attempts by developed countries to impose limits on textiles are discriminatory and protectionist, undercutting the very principles they are promoting.

Copyright Agence France-Presse, 2005

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