By Bruno Waterfield - 5th April 2005
Brussels has published new guidelines setting out conditions for the triggering of action against “massive surges” of Chinese textiles.
The European Commission has set thresholds, timetables and the conditions for “safeguard” measures to protect the EU textile industry from China.
Publishing the new guidelines, European Trade Commissioner Peter Mandelson insisted the new measures struck the right balance between market liberalisation and protection for EU industry.
“China, and its dramatic potential to increase exports… has become a key concern for a number of EU member states and European textiles producers,” he said on Wednesday.
“The guidelines recognise the legitimate concerns of member state governments and textiles sector, while allowing China to benefit from the lifting of quotas."
"They equip us to make a swift and effective response.”
The scrapping of WTO textile quotas on January 1 2005 has opened Europe’s doors to cheap textiles from an industrially rampant China.
“My aim is to ensure a smooth transition to a post quota world without incurring avoidable damage to our industry and vulnerable developing countries,” said the EU trade chief.
France, Italy, Spain and Czech Republic have raised fears that China’s share of Europe’s textile market, currently 20 per cent, could soar to 50 per cent or beyond.
“There is very serious concern in several member states about a surge in imports,” said Mandelson.
Mediterranean countries and close EU neighbours such Turkey Morocco and Tunisia have also expressed concerns as wells as some “very weak and vulnerable developing countries”.
“We can not stand by and watch if they are swept aside by a massive surge in imports from China,” said Mandelson
“I am very conscious of the fears and concerns that are being expressed.”
European Commission officials are currently examining import data since the January expiry of quotas.
“Some of the figures are very worrying though far from being definitive,” Mandelson said.
“It is too early to judge.” “We will only be able to judge after further evidence.”
Mandelson gave a “health warning” on some figures, he stressed that numbers of import licences granted to Chinese exporters would be “significantly” different to the number of actual imports into Europe.
“It is important for both China and European industry that the use of any safeguard measures is objective, transparent and based on credible data.”
Some countries such as Sweden have raised concerns that Europe is heading towards a new protectionism – a position that Mandelson denies.
“We should not confuse protection with protectionism,” he said. “I am not protectionist but I do believe in protection in the light of the facts.”
New guidelines establish “alert zones” for each category of textile import allowing for Chinese growth.
“To reach these alert zones Chinese exports will need to show a rapid and sustained rise over a defined period,” said a commission statement.
Fast-track emergency measures can also be taken in “case of a rise in imports of such magnitude that serious material injury to EU industry is imminent”.
In the case of a complaint to the commission over threshold alerts, officials will launch an immediate probe with 21 days for interested parties to submit allegations.
Informal consultations with China and a full technical investigation could then be triggered over 60 days.
After 60 days the commission, after consultations with national governments, can ask China for formal talks.
And within 15 days of that request China must limit exports to “the average level of the first 12 months of the 14 months preceding the initial investigation plus 7.5 per cent”.
Mandelson said the 75 day period was “superior” to a US timetable of 105 days for safeguard actions “almost certain to be challenged”.
“I intend to use these guidelines and if necessary, and guided by the facts, I will use safeguards,” he said.
“This is a very serious step not one that should not be resorted to lightly or automatically.”
In emergency cases, "in the case of a rise in imports of such magnitude that serious material injury to EU industry is imminent", formal negotiations with the Chinese could begin without the 60 day inevstigation period.
Under WTO rules the EU measures can only be used until 2008.
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