News Releases

Peter Mandelson

No. 42/05
April 25, 2005

EU LAUNCHES INVESTIGATIONS INTO SHARP SURGE IN CHINESE TEXTILE IMPORTS

EU Trade Commissioner Peter Mandelson announced yesterday that the European Commission will open investigations into sharp surges in imports of Chinese textile exports to the EU. This decision was made in the light of data on nine categories of textile imports from China during the first quarter of 2005. In all these categories, import volumes for Chinese textiles have risen above the "alert levels" defined by the guidelines published by the Commission on 6 April. The Commission will now conduct a two-month investigation to determine if market disruption has occurred and whether the EU should impose special safeguard measures. In parallel, it will launch immediate consultations with China in an attempt to find a satisfactory solution.

Announcing the investigation launch, Peter Mandelson said: "Member States have finally made available the import statistics for the first quarter of 2005. In several categories of textile and clothing imports they do give cause for serious concern. Based on these facts, Europe cannot stand by and watch its industry disappear. Our investigation will enable me to decide whether the EU should introduce safeguard measures. Chinese exports should, of course, be allowed to grow at a normal speed following the removal of quotas. But we must also extend protection to European industry if it is faced with a ruinous surge of unprecedented proportions."

The product categories to be covered by the investigation are: T-shirts, pullovers, blouses, stockings and socks, men's trousers, women's overcoats, brassieres, flax or ramie yarn and woven fabrics flax. In these nine categories import increases range from 51% to 534% since the start of the year. Under the terms of the guidelines published by the Commission, these rises are more than sufficient to warrant a wider investigation into market disruption, both in Europe and for textile producers in developing countries with an historic dependence on exports to the EU market.

The product categories concerned cover seven of the twelve product categories identified by the European textile manufacturers association Euratex in a letter to the Commission on 9 March 2005. The Commission has in addition identified two categories (T-shirts and flax yarn) not covered by Euratex request, for which the import trade figures call for action. A number of other categories appear to give cause for concern. But in these cases the import data need further analysis. This is being done.

The Textile Specific Safeguard Clause in China's WTO Accession Protocol (2001) allows WTO members to take temporary safeguard measures to protect domestic textile producers from a sudden surge in Chinese textile exports following the liberalization of the global trade in textiles on 1 January 2005. This clause allows for short-term protective measures until the end of 2008.

Next Steps

These investigations will last for a maximum of sixty days, of which the first twenty-one will be used to take submissions from parties. The Commission will make a thorough assessment of market impact in the affected product categories. During this period, the Commission will also hold informal consultations with China.

 
The Commission reserves the right, should massive and imminent damage to European textile producers be shown at any stage in the forthcoming investigation, to invoke the emergency provision in the April 6 guidelines and move directly to formal consultations with the Chinese.

At the end of the investigation, if the Commission determines that serious market disruption has occurred it can, in consultation with the EU Textiles Committee, launch formal consultations with the Chinese, requesting that they remedy the situation through quantitative export restrictions that hold exports to the level of the first twelve of the fourteen months prior to the launch of the investigation, plus 7.5% (6% for wool products). This is intended to allow for some year on year growth in Chinese exports, even under conditions of market protection.

As set out by the conditions of the Textiles Specific Safeguard Clause, these formal consultations shall last ninety days. However, if after the first fifteen days of this period China has not taken any action to self-limit exports, the Commission can, in consultation with the EU Textiles Committee, act without delay to restrict imports from China at the same levels. At the end of the ninety day period, if no remedy is found, the Commission and the EU Textiles Committee can decide to propose safeguard measures. They will be effective from the prior date of launching formal consultations with the Chinese.

At no stage of the process is there any automatic advance to the next stage.

Any possible safeguard measures would take the form of a quantitative import restriction and could be put in place until December 31 of the current year, or for twelve months if the request for formal consultations comes in the last three months of the calendar year.

Annex : Product categories now under investigation

Background:

http://www.eurunion.org/News/press/2005/2005031.htm.