Sun, Jun 12, 2005 - Page 11 News List

China agrees to EU textile pact

TRADE DISPUTE The two sides agreed to curb growth in Chinese textiles exports to Europe by between 8 percent and 12.5 percent a year for the next three years

AFP , BEIJING

China said yesterday it will limit growth in exports of 10 textile and clothing products to the EU to between 8 percent and 12.5 percent a year in a bid to defuse a trade row straining ties between them.

The announcement came after more than 10 hours of negotiations between Chinese Commerce Minister Bo Xilai (薄熙來) and EU Trade Commissioner Peter Mandelson in Shanghai on Friday, in which the two sides agreed to curb Chinese textiles exports to Europe in the next three years.

"China and the EU have agreed that, in the period from 11 June 2005 to the end of 2007, with an agreed base quantity, we will determine China's amount of exports to Europe by a growth rate of between 8 to 12.5 percent per year," the Ministry of Commerce said in a statement on its Web site.

In 2008, the EU will only apply "with restraint" paragraph 242 of China's World Trade Organization (WTO) accession protocol on textiles, which requires China to limit exports of textile products, the statement said without explanation.

According to a memorandum, the EU has agreed to stop its investigation into Chinese exports of 10 textile products to Europe, including cotton cloth, T-shirt, flax yarn, bed sheets, table-cloth and trousers, the statement said.

"During the negotiations, both sides recognize that the textile trade is an important component in the China-EU bilateral trade relations," it said.

"On the basis of all-round China-EU strategic partnership and bilateral cooperation, we agreed to abide by the win-win principle and to actively promote the stable and healthy development of the textile trade," it said.

China's textile exports to EU were worth US$10.79 billion last year, 6 percent of the total China-EU bilateral trade, which totalled US$177.3 billion, Xinhua said.

China's state media yesterday hailed the agreement, saying the 25-nation bloc's positive approach contrasted sharply with that of the US.

Xinhua published a lengthy commentary praising the EU for upholding "the principles of free trade" and criticizing the US' "protectionist" stance.

"EU's move is in sharp contrast with the US slapping of import limits, an approach that is widely criticized by the international community as discriminatory and protectionist, undercutting the very principles it is promoting," it said.

The EU and the US have both expressed concern over a huge jump in Chinese T-shirt and flax yarn exports following the end of the global textile quota system on Jan. 1. Washington has since slapped import quotas on seven categories of Chinese textile goods.

But Chinese official statistics showed clothing and apparel exports between January and April this year were only up 15.16 percent over the same period of last year.

State media said the agreement with the EU will safeguard the interest of the Chinese textile industry and provide a stable trading environment for Chinese companies.

But some Chinese expressed dissatisfaction over their country's action, lambasting the government for selling out Chinese workers' interests and giving in to foreign pressure.

"It feels like we have made a one-sided concession. Under the WTO rules the textile trade should be completely free," said one Internet posting on the bulletin board on the popular sina.com Web site.

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