Mandelson seeks China textiles truce

Trade Commissioner Peter Mandelson has begun talks with the Chinese government aimed at setting up a collaborative system for controlling imports of textiles into the EU.

Current quotas on Chinese textile goods set up after the controversial ‘bra wars’ of 2005 could be replaced next year by a joint EU-China monitoring system.

The approach was described by a Commission official as "atypical". "We want to set it up, but still need to conclude the agreement with the Chinese. It should come into play as a successor instrument to the current quotas," he said.

Current quotas were agreed by Mandelson and the Chinese government in 2005. The restrictions, aimed at giving EU firms time to adjust to China’s growing power in the textile trade, limit the growth of clothing imports to 10% a year until the beginning of 2008.

The explosion of China’s textile trade followed the scrapping in 2004 of the multi-fibre arrangement (MFA), a complex web of tariffs and quotas first negotiated in 1973 under the General Agreement on Tariffs and Trade to protect textile producers in industrialised countries as they restructured in the face of competition from developing economies.

But EU firms with domestic production facilities were ill-prepared for the flood of imports onto the EU market that followed the expiry of the MFA. The EU was entitled to impose new interim quotas under the terms of China’s World Trade Organization membership conditions agreed in 2001.

The joint monitoring system marks a new, collaborative approach to trade relations with the Chinese. Under the double-checking system, the Chinese authorities would have to produce documentation confirming the origin of textile products to be verified by EU customs authorities.

Eurocommerce, the umbrella group representing retailers and wholesalers buying Chinese textile imports, is worried that the system might allow scope for a reintroduction of quotas, a move that would cause disruption to retailers’ and wholesalers’ activities. Ralph Kamphöner, trade adviser at the group, said: "The surveillance is not what we were dreaming of, but it is still better than quotas. As far as we understand from Mandelson, there will not be quotas next year. But they could have been more explicit on that.

"We believe the Commission’s words that 2008 will be a quota-free year. Our members still believe in that. Next year, most of our members are preparing for a quota-free year, giving them the possibility of planning based on solid, reliable information."

Retailers had previously feared that this year’s review of textile quotas had been delayed by EU manufacturers keen to secure the support of the Portuguese presidency for an extension of quotas.

Garment manufacturers, represented by the European Trade Union Federation of Textiles, Clothing and Leather, deny that they are fighting for continued quotas. General Secretary Patrick Itschert said: "We are not asking for any prolongation of quotas. We prefer negotiated measures over imposed measures.

"We have to make sure, and I refer to the trade defence instruments review, that what comes in is produced under fair conditions and not only in terms of what is important for the EU, but also for least developed countries."

Mandelson’s highly-politicised review of trade defence instruments has now been postponed to late November or possibly December. The Commission’s public consultation on the issue attracted a flood of responses, which are still being considered.

Trade Commissioner Peter Mandelson has begun talks with the Chinese government aimed at setting up a collaborative system for controlling imports of textiles into the EU.