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EU textiles producers worry about China surge

(Reuters)
Updated: 2007-04-13 09:04

BRUSSELS - European textiles and clothing producers have urged Brussels not to leave them exposed to the full force of Chinese exports when a controversial quota system expires at the end of this year.

After a dispute dubbed "Bra Wars", the EU persuaded China in 2005 to accept temporary limits to slow a surge in Chinese exports of goods ranging from bed linen to underwear.

European producers are now worried about a new flood of imports once the quotas expire at the end of 2007, particularly because similar quota deals between China and the United States and other importer countries only expire at the end of 2008.

"We do not wish to be the only focus of Chinese export ambitions in 2008," said Michele Tronconi, president of European apparel and textile organisation Euratex.

He told reporters he met EU Trade Commissioner Peter Mandelson recently and asked him how he intended to "rectify the imbalance". "We have agreed that Euratex and the Commission need to reflect," Tronconi said, declining to comment further.

But an EU official said European industry had been given a transition period to adapt to the effects of full liberalisation of textile trade with China and there were no plans to seek an extension of the quota system.

"The quotas will expire at the start of 2008. There are no plans at this time to extend them for 2008," the official said.

The 2005 dispute split the EU between countries with big textiles industries, chief among them Italy, France and Spain, and free-traders who slammed the limits as protectionism.

LITTLE IMPACT

Chinese textiles and clothing exports were subject to a global quota system until the end of 2004, after which an export surge led the EU, the United States and other countries to negotiate temporary limits.

According to the World Trade Organisation (WTO), the limits had little impact on China's textile and clothing exports worldwide, which rose 25 percent in 2006, against a 21 percent gain the previous year.

"The new restrictions had no apparent effect on China's overall exports of textiles and clothing to the world," the Geneva-based body said in its annual world trade outlook.

The outlook gave no figures in dollars, but it said China continued to gain market share in all major developed countries despite the restrictions.

According to Chinese figures issued earlier this year, the country's firms exported $95.2 billion worth of clothing and $48.8 billion in textile products in 2006, notching up annual growth of 28.9 percent and 18.7 percent, respectively.

The WTO said textile and clothing exporters from advanced east Asian economies such as Taiwan, Hong Kong and South Korea lost market share along with those from Central America and the Mediterranean region.

But five Asian countries besides China saw double-digit growth in their textiles and clothing exports in 2006 -- Pakistan, Cambodia, Bangladesh, Indonesia and Vietnam.