China’s trade minister says that the pace of textile imports in the EU from China is starting to slow.
The European Union has increased the pressure on China to do so before it has to “take action”.
“Europe cannot stand by and simply watch these developments unfold. The time has come to take further action,” said EU commissioner Peter Mandelson. “I urge China to take a fresh look at the measures they have put in place already, and explore whether they cannot do more.”
The European Commission is said to be launching an investigation within the next 150 days into what further action can be taken on China’s end. The investigation is expected to last no more than 60 days.
“China is very aware of the importance of this issue for France and the European Union,” said Chinese trade minister Bo Xilai “We believe solutions can be found.”
Asia Times explains:
Under the old Multi-Fiber Agreement clothing and textiles quota system, which started in 1974, each country was set export limits. Exports of certain Chinese clothing items to Europe have surged since the quota system came to an end on January 1, as China continues to take advantage of its cheaper labor and manufacturing costs. According to figures from the World Trade Organisation (WTO), China currently has a 20% share of global textile exports, but the EU predicts that this could rise to 50% within five years. This is likely to hurt producers in developing countries such as Bangladesh and Sri Lanka, which have traditionally benefited from the quota system. Under WTO rules, the EU could limit textile and clothing imports if they rise anywhere between 10 and 100% of 2004 levels.
European textile industry groups say that tens of thousands of jobs are being lost due to the increase in imports.
Bo Xilai expects Chinese textile exports to see a large decrease by the summer.
Chris is a staff writer for Murdok. Visit Murdok for the latest ebusiness news.
