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Six Types of Textile Exports Face Duties

China planned to detail export duties on six types of textile products and the measures were not expected to have a big impact on the domestic textile industry, Long Yongtu, who led China's negotiations to enter the World Trade Organization, said Sunday.

Not all of China's textile products for export would be hit with a duty, Long said. He did not elaborate further.

The remark comes a week after China announced it would impose a duty on textile exports starting Jan. 1, 2005, when the international Multifiber Agreement (MFA) is due to expire.

The agreement has permitted the use of import quotas to regulate the multi-billion dollar annual world trade in garments since 1974.

The Ministry of Commerce said two weeks ago it planned to introduce export duties on textiles, which effectively uses a tax to drive up the price of China's textile products, and ensure companies "export in an orderly way."

But the ministry is yet to provide details about the duties.

Long, who was speaking at a conference discussing the end of the Multifiber Agreement and China's outlook, said China hoped for the stable and healthy development of the global textile market in the post-Multifiber Agreement era.

Long cautioned against overestimating the impact the end of the MFA would bring to the global textile industry, as well as the amount of opportunities and challenges that would face China with the agreement's expiry.

"We need to face the post-MFA era with a normal mentality," Long said. "The psychological impact from (the end of MFA) will be greater than the actual impact."

He pointed out the agreement's expiry had been anticipated for the past 10 years, when global negotiators first began plotting the demise of the fiber pact.

The MFA expiry meant one factor affecting international textile trade was eliminated, but it did not mean there would be unfettered free trade, Long said.

While Long said he was "optimistic" about the post-MFA era, he warned fears about the end of the agreement could still result in some negative repercussions.

Once the agreement expires, countries will have to compete solely on quality and price, giving China's huge low-cost textile industry a possibly sharper, competitive edge.

Earlier this month, Premier Wen Jiabao was asked by European leaders during a China-EU summit in the Netherlands to moderate textiles exports to pre-vent retaliatory action against a flood of cheap products.

(Shenzhen Daily December 21, 2004)

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