Beijing criticize EU scrutiny of textile imports

Beijing criticized EU scrutiny of textile imports from China on Sunday amid mounting trade dispute with the United States and Europe, after the 25-nation bloc took its dispute with Chinese textile imports to the World Trade Organization, forcing an immediate curb in shipments of T-shirts and flax yarn.

China lashed out at the European Union, saying it violated the spirit of free trade.
“The Chinese side thinks that the European side launched an investigation and made a decision … based only on three months of data,” Commerce Ministry spokesman Chong Quan said in a statement posted on the ministry’s Web site. “It’s an inaccurate assessment and an incorrect decision.”

The EU Executive Commission, in charge of trade policy in the 25-nation bloc, said intensive talks would take place starting on Monday at all levels with China over its textile exports.

The EU claims its textile industry has been seriously hurt by the opening of its market to Chinese exports on Jan. 1, losing production and employment. The United States already has imposed limits on Chinese exports.

The EU Commission last month opened an investigation into nine products — including pullovers and men’s trousers — after imports jumped by more than 400 percent in the first quarter of the year.

According to EU figures, Chinese imports of T-shirts rose by 187 percent in the first four months of 2005, compared to the same period last year, while flax yarn imports rose by 56 percent.

The EU took the dispute to the WTO on Friday, giving China 15 days to react. It also means that the EU will restrict imports of flax yarn and T-shirts to no greater than 7.5 percent above the amount entering its market between March 2004 and February 2005.

But Chinese Commerce Ministry spokesman Chong Quan said last week China’s global textile exports grew 18.4 percent in the first four months on 2005 year on year.

“It not only sent the wrong signal of trade protectionism to the European industry, it also harmed the rights that Chinese enterprises should enjoy in the globalization of textile trade,” Chong said.

Under the terms of China’s WTO membership, if another member state can establish that Chinese textiles are disrupting the market, it may request bilateral consultations at the WTO.

The EU said it put the issue before the WTO after a “thorough and fruitful” telephone discussion between EU Trade Commissioner Peter Mandelson and Chinese Trade Minister Bo Xilai.

But, the EU said, it was still open to discussion outside the WTO framework if that could lead to a deal.

Chong stressed that China was a “responsible member of the WTO and has already adopted a series of positive measures on its own initiative” and said Beijing was willing to resolve the problem through dialogue.

Earlier this month, China announced a sharp increase in export tariffs in an effort to avert a trade war with the United States and Europe.

The United States imposed import quotas in mid-May on Chinese-made cotton pants, underwear, synthetic fiber shirts and other goods. The quotas limit annual growth of Chinese textile imports to 7.5 percent - well below the 54 percent jump reported so far this year by the U.S. Commerce Department.

China imposed a 1.3 percent export tax on textiles in December on the eve of the end of global quotas, but American officials said that was too low to make a difference.