EU and China in textile truce
published: cw 23, 2005 in Global Trade & LogisticsThe European Union and China on Friday stepped back from a potentially bitter trade dispute by negotiating a three-year “transitional arrangement” for the import of Chinese textiles to Europe. The two sides agreed to limit the increase in Chinese textile imports in each of the next three years before the trade is fully liberalised in 2008.
The eleventh-hour deal followed a tense day of talks between Bo Xilai, China’s commerce minister, and Peter Mandelson, the EU trade commissioner, who had threatened to impose new trade quotas on two types of Chinese imports. The immediate consequence of the deal is that the EU will suspend planned sanctions against two categories of exports, flax yarn and tee-shirts. Those temporary curbs had been due to come into force as early as Saturday.
The EU-China deal could put pressure on Washington to reach a similar agreement with Beijing. Washington’s decision to re-introduce quotas has also exposed a clear split in US industry, with retailers launching legal action against sanctions that would limit their access to cheap Chinese clothing. In a swipe against the US, Mr Bo said: “Unlike some other countries, the EU didn’t take unilateral steps against China, but discussed the issue in a friendly manner.”
Source: Financial Times
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