June 9, 2005

Mandelson meets Chinese on export controls

by brian_turner

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European Trade Commissioner, Peter Mandelson, is meeting Bo Xilai, China’s Commerce Minister, in Shanghai on Friday, to try to secure controls on Chinese exports.

The European Union is concerned that the substantial increase in Chinese textile imports, following the lifting of quotas at the beginning of the year, is seriously affecting European producers.

China believes that the EU and the US are acting unfairly by seeking to limit imports. According to Mr Bo, China sees the textile issue as an indication of whether the developed world is committed to fairness in enforcing free trade rules.

Mr Bo told reporters “China will protect its industry’s legitimate rights, and on the other hand will act in line with WTO regulations”.

Since the Multi Fibre Agreement ended on 31 December 2004, both the EU and US have expressed concerns about an increase of up to 400% in Chinaâ€™s textile exports. The EU also says that shoe imports from China have increased 700% since the start of the year.

Unless China agrees to limit export growth to 7.5% on T-shirts and flax yarn, the EU may impose quotas. An investigation into imports in seven other categories is also being carried out. When China joined the World Trade Organization in 2001, it agreed to allow other members to control its clothing exports if their markets were being adversely affected.

China says that Europe and the US must present clearer evidence before sanctions are imposed. Mr Bo has warned that China may delay opening up its markets to agricultural products.

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