By  on July 24, 2007

GENEVA — European Union Trade Commissioner Peter Mandelson has proposed that the lifting of quotas on 10 categories of Chinese textiles and apparel imports at the end of the year be followed by a bilateral monitoring mechanism, trade officials and industry executives said Monday.

"Our aim is to have a dual monitoring mechanism" jointly operated by China and the EU to keep a tab on imports in order to ensure there's no disruption to trade, a spokesman for Mandelson said.

"It seems the European Commission, the executive arm of the 27 EU member states, is very keen on a double surveillance system," said Stuart Newman, legal adviser of the Brussels-based Foreign Trade Association, an umbrella group for importers and retailers.

Newman said the plan would create more administrative burdens for Chinese exporters and European importers.

Diplomatic sources said the majority of EU country trade ministers are not in favor of prolonging the current arrangement, with the exception of France and Poland, and prefer the monitoring program, and China is clearly against continuing the current quota system.

Following a surge in imports with the end of the global quota regime on Jan. 1, 2005, Mandelson and China Commerce Minister Bo Xilai brokered a deal in June 2005 under which the growth rates in 10 sensitive categories were limited to between 8 and 12.5 percent until the end of 2007.

Mandelson met with industry representatives and EU trade ministers in a series of meetings Friday, Sunday and Monday, following discussions in Beijing last week with Chinese trade diplomats over the proposed monitoring mechanism.

Diplomatic and industry sources said China has not decided whether to support the plan.

FTA's Newman said his group would ideally like no impediments, but the surveillance program is preferable to new quotas.

Asked how the end of the quotas were to impact the EU market, Newman said he expected a small increase in Chinese imports and noted that buying of textiles and apparel is cyclical and "orders have already been placed for 2008."

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