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Last Updated: Monday, 25 April, 2005, 11:54 GMT 12:54 UK
EU trade boss to have China talks
Chinese woman arranges a clothing display
'Pile 'em high, sell 'em cheap' is not winning China friends in the EU
Peter Mandelson, the EU's trade commissioner, was travelling to Hong Kong on Monday for talks with China on limiting textile exports to the EU.

Mr Mandelson will have informal talks aimed at avoiding sanctions. He has also called for an EU probe into the impact of Chinese exports.

Sales of some Chinese goods have surged this year and there are concerns that European firms are suffering.

Mr Mandelson has called on China to curb exports or face enforced limits.

I don't regard China as a threat, but as a welcome and important member of the trading community
Peter Mandelson, EU

The commissioner was careful to play down the threatening nature of his comments over a problem that has arisen from everyday articles such as socks, T-shirts, bras, blouses and trousers.

Gentle approach

"If there are some interests in Europe who want to see some sort of trade war with China launched over this, then they are looking to the wrong person," Mr Mandelson told a news conference over the weekend.

"I don't regard China as a threat but as a welcome and important member of the international trading community."

An EU official said that they hoped to avoid "formal" talks with China.

"If we get to formal talks, then things are pretty serious," the official said.

Tight weave

Under the Multi Fibre Agreement clothing and textiles quota system, which started in 1974 and came to an end on 1 January of this year, each nation was set export limits.

Chinese textile workers
China dominates textile production

Since the accord expired this year, China has significantly increased its exports to drive economic growth and take advantage of its cheaper labour and manufacturing costs.

Mr Mandelson has called for a probe into the effect these exports are having on European producers, consumers and other manufacturing nations such as Morocco and Tunisia.

An EU official explained that just because Chinese exports may have surged, it did not mean that all exports were up - there may, for example, have been a drop in sales from other countries.

There may also have been a beneficial effect for the consumer that needs to be taken into account.

Weight behind

Luxembourg's deputy foreign minister Nicolas Schmit said the EU's 25 trade ministers all backed an investigation.

"We have to deal with this urgently," he said on Monday. "We don't exclude safeguard measures."

The EU is expected to approve the investigation in the middle of this week and it will take a maximum of two months to run its course, the official said.

The World Trade Organisation (WTO) estimates that China made 17% of the world's textiles in 2003. This figure is expected to top 50% within three years.

The European Commission reckons that imports of Chinese T-shirts into EU member states rose by 164% in the first three months of this year, while imports of pullovers leapt by 534%.

WTO rules state that countries which can prove that excessive Chinese clothing imports are causing "market disruption", can limit the growth in Chinese imports to 7.5% a year until 2008.


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See why the Commission is investigating




SEE ALSO:
EU warns China on textile exports
24 Apr 05 |  Business
China anger over EU textile move
07 Apr 05 |  Business
Millions 'to lose textile jobs'
16 Dec 04 |  Business


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