EU rejects hasty action against Beijing on textile trade clashes

May 30, 2005 - France

The European Union's top trade negotiator has dismissed the possibility of a trade war with China over surging Chinese textile imports and rejected "precipitate" EU action against Beijing. "There is no question of any diplomatic break or any sort of trade war between Europe and China," EU Trade Commissioner Peter Mandelson said here Thursday after a meeting with Chinese Trade Minister Bo Xilai. EU Trade Commissioner Peter Mandelson shakes hands with Chinese Trade Minister Bo Xilai after a meeting in Paris focused on the sharp rise in Chinese textile exports to Europe May 5, 2005. Mandelson has dismissed the possibility of a trade war with China over surging Chinese textile imports and rejected 'precipitate' EU action against Beijing. "Both of us know there's much more at stake in the long term for trading and economic relations for Europe and China to allow the issue of textiles to undermine that strategic partnership." The EU executive commission last week launched an investigation into recent sharp increases in Chinese imports into EU countries that followed the abolition of a global quota system on January 1. The procedure, under World Trade Organization regulations, could lead to the imposition of temporary curbs on nine categories of Chinese textile imports. Bo stressed that China had been "very prudent" in managing the flow of EU-bound textile products and had adopted 10 measures that had already led to a "considerable" slowdown in the growth of such exports to
to Europe in March. "We only hope to see a stable increase," he said. Mandelson acknowledged that China had taken steps to check the export flow but added: "They have not had the impact that I would have liked to have seen." Four EU textile producers -- France, Italy, Spain and Greece -- have asked the European Commission to apply emergency procedures that could speed up the application of limits. Mandelson said that such special measures would be considered if it is determined that any of the nine categories of clothing imports under investigation required "more pressing or critical" action. But he insisted that the commission would not be pressured into acting hastily and said the probe would stick closely to WTO rules. "I'm not going to take any action that is precipitate, that is reactionary, that is going to turn the clock back on textile imports," Mandelson said. "I'm not going to depart either from the rules or the facts. ... We're talking about managing the growth (of imports) in the short term," he said. Bo and other observers to the dispute, notably former EU trade commissioner Pascal Lamy, have attributed the import surge to inaction by the EU textile industry, which had 10 years to prepare itself for the end of the quota system last January. Mandelson rejected that argument, telling reporters "the overwhelming bulk of European industry prepared for this -- has restructured, has re-adjusted. "But it may be that a further temporary period, a breathinging space (is needed) for industry to restructure further." Mandelson said a team from the European Commission would travel to Beijing in the next week for further talks at technical level. In addition, French Industry Minister Patrick Devedjian is to go to China in the next two weeks to discuss the textile issue.