Our Bureau

New Delhi, April 26

THE European Union (EU) Trade Commissioner, Mr Peter Mandelson, has announced that he has decided to ask the European Commission to authorise him to launch investigations into nine categories of Chinese textile exports to the EU in the light of a sharp surge in imports from China during the first quarter of 2005.

In all these categories, import volumes for Chinese textiles have risen above the `alert levels' defined by the guidelines published by the Commission on April 6, 2005, an EU statement said in Brussels on Monday.

The Commission will now conduct a rapid investigation (maximum two months) to determine if market disruption has occurred and whether the EU should impose special safeguard measures. In parallel, it will launch immediate consultations with China in an attempt to find a satisfactory solution.

Mr Peter Mandelson said: "Member-States have finally made available the import statistics for the first quarter of 2005. In several categories of textile and clothing imports they do give cause for serious concern. Based on these facts, Europe cannot stand by and watch its industry disappear. Our investigation will enable me to decide whether the EU should introduce safeguard measures. Chinese exports should, of course, be allowed to grow at a normal speed following the removal of quotas. But we must also extend protection to European industry if it is faced with a ruinous surge of unprecedented proportions".

The product categories to be covered by the investigation are T-shirts, pullovers, blouses, stockings and socks, men's trousers, women's overcoats, brassieres, flax or ramie yarn and woven fabrics flax.

In these nine categories import increases range from 51 per cent to 534 per cent since the start of the year. Under the terms of the guidelines published by the Commission, these rises are more than sufficient to warrant a wider investigation into market disruption, both in Europe and for textile producers in developing countries with an historic dependence on exports to the EU market.

The product categories concerned cover seven of the 12 product categories identified by the European textile manufacturers association Euratex in a letter to the Commission on March 9, 2005.

The Commission has in addition identified two categories (T-shirts and flax yarn) not covered by Euratex request, for which the import trade figures call for action.

Textile Specific Safeguard Clause in China's WTO Accession Protocol (2001) allows WTO members to take temporary safeguard measures to protect domestic textile producers from a sudden surge in Chinese textile exports following the liberalisation of the global trade in textiles on January 1. This clause allows for short-term protective measures until the end of 2008, the statement said.

(This article was published in the Business Line print edition dated April 27, 2005)
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