The chief trade officials of the European Union and China are to hold emergency talks this week to try to bolster a textiles agreement that is being threatened by shipments of pullovers and trousers that exceed quotas for Chinese textile exports.
On Tuesday, two months after the EU and China defused a trade dispute over booming Chinese clothing exports by setting limits on 10 categories of exports until 2008, it emerged that China had exceeded the 2005 export ceiling for men’s trousers. Last week, China exceeded the quota for pullovers.
Some of these larger-than-anticipated shipments have been blocked in transit from China to the EU, leaving European retailers facing the prospect of having empty shelves.
Last week, German retailers estimated that as many as 22m pullovers were awaiting clearance to be sold in the EU. Some EU diplomats privately have voiced concerns about China’s willingness and ability to operate tight restrictions on exports in the wake of its agreement with the EU.
However, Peter Mandelson, the EU’s trade commissioner, yesterday put the blame for the difficulties on European retailers and traders, suggesting that they had massively stepped up their orders from China “to get these goods into Europe under the wire” before July 11, when the EU-China agreement came into force.
Mr Mandelson added: “The [European] Commission has kept importers and retailers informed of developments at every stage. However, the sheer scale of their attempt to beat the restrictions has presented us with immense difficulties.”
Mr Mandelson is expected to talk to Bo Xilai, the Chinese trade minister, in coming days.
The Foreign Trade Association, a European body representing retailers and importers, said it was disappointed by Mr Mandelson’s accusations. It criticised the June agreement for not addressing adequately the issue of importers that completed orders many months before the deal.
Earlier this month, the European Commission overcame initial resistance from some member states to the idea of a more flexible handling of the agreement and secured an internal EU agreement to allow China to raise the 2005 ceiling for pullovers by using this year as much as 10 per cent of the pullover import quota earmarked for 2006. China has not yet formally endorsed that arrangement.
Mr Mandelson yesterday also indicated that discussions could drag on, even though Brussels and Beijing are under pressure to respond rapidly to the problem of goods stranded in transit.
The Commission has also asked EU member states to provide further import data by August 15, to establish the extent to which Chinese exports may have reached or surpassed agreed ceilings, including in categories such as bras and T-shirts, where China has become a key and inexpensive supplier for western retailers.
Mr Mandelson said: “Final decisions, including some flexibility on the future management of the quotas, will not be taken until early September and will be resolved in agreement with the Chinese authorities.”
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