State of S. Paulo, 25/04/2005

Reuters and AP

European Union (EU) Trade Commissioner Peter Mandelson threatens to impose barriers against China's textile imports if the Chinese government does not restrict its exports. Mandelson announced that the EU will open an investigation today on the import of nine categories of textile and clothing products from China. The import of some textiles has grown more than 500% since the end of the quota regime in December 2004, which limited the purchase of these products.

“Europe cannot just stand by and watch these events. The time has come to act, ”said Mandelson, while announcing the opening of the investigation. "If the facts justify it, we will adopt safeguards." After the executive committee starts the investigation recommended by Mandelson, the EU will be able to impose formal barriers on Chinese products in 150 days.

But major textile producers, including France, Portugal and Italy, said that the measure proposed by Mandelson is insufficient. They want more than 20 product categories to be investigated. According to the rules of the agreement of China's entry into the World Trade Organization (WTO), in 2001, countries can limit imports of textiles and clothing from China until 2008, provided that they demonstrate damage to their industries.

China held 17% of the world market for textiles and clothing in 2003, but the WTO expects Chinese participation to rise to 50% in the next three years.

Mandelson wants a thorough investigation into the increase in imports of T-shirts, pullovers, pants, bras, socks, women's blankets, linen thread and fabrics. EU data show that in the first quarter the import of T-shirts grew 164%, that of pullovers rose 534% and that of men's trousers, 413%.

Many countries are not satisfied. "We should go faster with the measures," said France's trade minister, François Loos, after meeting Mandelson yesterday in Luxembourg, where a ministerial session with EU countries would take place.

Portugal's Economy Minister Manuel Pinho said that a group of 12 European textile-producing countries identified 20 product categories that should be investigated. "It may take up to nine months, and, given the seriousness of the situation, we want an emergency procedure," said Pinho, after meeting with Mandelson.

But other businessmen say that consumers would benefit from increased competition between imported clothing and any measure to stop products would be protectionist. “The textile industry had ten years to prepare for the end of quotas. We see no reason to impose barriers now, ”said Lars-Olof Lindgren, Sweden's secretary of commerce.

China had imposed export restrictions on itself since January, to avoid fear of invasion. But Mandelson wants the country to do more. "I ask China to review the measures it has imposed to limit its exports and see if it can do more than that."