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Manufacturers, Exporters, Wholesalers - Global trade starts here.

EU Agrees to Stop Probe into Chinese Textile Exports

The European Union has agreed to stop investigations on ten categories of textile products from China, according to the agreement signed by both sides at the early hours Saturday in Shanghai.

China and EU also reached consensus on the annual growth of exports to the European market for the ten lines of Chinese products from June 11, 2005 to the end of 2007. With an agreed base quantity, the annual growth is set to be limited between 8 percent and 12.5 percent during the period, said sources with the Chinese Ministry of Commerce.

Both sides agreed to address problems emerging from textile trade "through consultation," according to the agreement.

The ten lines of textile products include cotton cloth, T-shirts, pullovers, trousers, blouses, sheets, dresses, brassieres, table cloth and flax yarn.

The agreement was reached after ten-hour-strong close-door talks between Chinese Commerce Minister Bo Xilai and visiting EU Trade Commissioner Peter Mandelson.

In April, EU published a guiding booklet on restrictive measures on textile products from China based on Article 242, setting concerned conditions and procedures for the restriction.

After that, EU launched a probe into a dozen of China-made textile products and decided on May 27 to propose a request for official consultation with China on T-shirts and flax yarn.

Following the concerned procedures, China and EU should find a solution to the dispute satisfactory for both within 15 days. Otherwise, EU would take the restrictive measures.

During the long negotiation Friday, Bo and Mandelson agreed that textile trade constituted an important integral part of China-EU trade.

In line with mutual benefits and taking into consideration the China-EU strategic partnership, the two sides agreed to actively promote the steady and healthy development of textile trade, properly handle existing problems and avoid any unilateral act or trade friction.

The Saturday agreement drove away the clouds hanging over the Chinese textile producers during the past several months.

China's national associations representing domestic textile producers and exporters have welcomed the agreement.

In a telephone interview with Xinhua, Sun Huaibin, spokesman for the China Textile Industry Council, said the Council welcomed the agreement as it will help ensure a relatively stable trade environment for Chinese textile exports to Europe.

Also applauding the deal, the China Chamber of Commerce for Import and Export of Textile said both China and EU have agreed to resolve future textile trade issues through "consultations," which set a good precedent of solving textile trade disputes under the new global situation.

Such an approach is of great significance for global textile and garment sectors in their transition to a new trade situation, the chamber said in a statement.

"We have also noticed EU's positive approach on China-EU textile issues, and we hope EU will continue to move forward along the path of textile trade liberalization," said the chamber.

Most Chinese textile enterprises felt great relief when they heard about the news of the China-EU textile deal, which means that an escalation of the trade row has been avoided.

Xiao Yugui, president of Shanghai Textile (Group) Co. Ltd, said the Sino-EU deal will provide a relatively stable and foreseeable external environment and help "mitigate the risk of uncertainties for the textile trade."

One of the leading textiles exporters in China, the company exported two billion US dollars worth of textile products last year, of which one fourth were sold in Europe.

Qian Feng, vice president of the Shanghai-based Huayuan Textiles Group, said the accord is certainly good news for domestic textile manufacturers, who have lived in the shadow of the trade row for months.

Qian said his group had been afraid of taking new orders in the past several months, and most of its foreign clients also dare not place orders as the trade row was hanging on.

Lu Kunping, a salesman with the Ningbo Bridge Knitting Group in east China's Zhejiang Province, said he had stayed up all night Friday till early Saturday morning by the TV, just waiting for news reports on the results of the negotiation.

"Foreign buyers suspended their orders, while domestic producers like us were also hesitant to accept them since the United States and the EU imposed quotas and launched investigations on China's clothing products." said Lu.

Ning Jinyuan, general manager of Tianjin Textile Group Import and Export Inc., said the EU side should also feel happy for the results since 90 percent of the profits from China's textile exports go to the EU brand-holders, retailers and wholesalers.

Zhang Hanlin, a professor with the University of International Business and Economics, said the China-EU agreement is in line with the WTO spirit and will lead to a win-win result.

Zhang, a WTO expert, also cautioned that the Chinese textile producers should remain sober-minded and be prepared for more possible difficulties in the future.

The China Chamber of Commerce for Import and Export of Textile on Saturday also urged Chinese textile firms to constantly improve their international competitiveness, and to avoid future trade disputes through industrial self-discipline while strengthening cooperation with their EU counterparts for mutual benefit.

Xiao Yugui, the Shanghai textile manufacturer, said his company will embark on a new development road of "fashion plus technology."

In east China's Jiangsu Province, another major textile production base of the country, Lin Houyu, chief engineer with the Jiangsu Textile Group, said he hoped China and the United States could also settle their textile trade disputes through "negotiations on an equal footing."

(Xinhua News Agency June 12, 2005)

China, EU Reach Deal to Settle Textile Dispute
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