Member states split over Chinese puzzle

Date: 20/03/1997

By Tim Jones

A NORTH-South divide has opened up between EU member states over plans to relax curbs on imports of Chinese goods.

Germany, the UK, the Netherlands and the Nordic countries are lining up against France and the Mediterranean states as the European Commission continues its softly-softly campaign to unpick the Union's three-year-old regime of quotas against China.

The split has emerged ahead of a meeting of national experts today (20 March) to begin negotiations on the Commission's review of existing restrictions on toys, tableware and shoes.

The current ceilings were introduced in March 1994 to buy off opposition from southern member states to the settlement of the Uruguay Round global trade talks.

Trade Commissioner Sir Leon Brittan is particularly keen to bring China into the World Trade Organisation and wants to avoid antagonising Beijing.

The quota system has already been brought into disrepute by anomalies such as that which allows Chinese teddy bear makers to class their products as musical instruments to get round the 1.05-billion-ecu limit on toy imports.

Even the EU's major toy manufact-urers are opposed to the current regime. “The quota can be useless since people can get around it if they try,” says Maurits Bruggink, of the Toy Manufacturers of Europe.

In its annual review of the system, Commission officials have proposed reforms to the controversial quotas on toy imports which would allow components to enter the EU freely. This would mean that Chinese exporters could transport the legs and arms of Barbie dolls for assembly in the EU, with the aim of promoting jobs - a proposal which appears to be broadly acceptable to most member states.

But the Commission has run into tougher opposition, from France in particular, over plans to bring an end to the quota on glass tableware. European manufacturers want the quotas to stay and warn of a continued loss of market share to imported glassware if they are relaxed.

Nevertheless, the Commission report shows that while Turkey and eastern European countries have boosted their share of exports to the EU, China's share has halved over the life of the quota. Moreover, European producers tend to concentrate on high-quality products while the Chinese compete only at the cheap end of the market.

Although the Commission is pressing for a more flexible regime, it sounds a warning.

“China has enormous and growing production and export capacity in the sectors covered by quantitative restrictions and its exporters would, in their absence, soon be in a position to unleash huge quantities on the Community market,” says the report.

Under the Commission's plan, sensitive quotas on imported footwear would be left unchanged.