GENEVA — Echoing the complaints of the U.S. textile industry, the president of the European Apparel and Textile Organization, Filiep Libeert, this week called for the European Union to take prompt safeguard action against a massive surge in imported Chinese products.
This story first appeared in the January 16, 2004 issue of WWD. Subscribe Today.
The Euratex chief said EU authorities face a stark choice. They can take “whatever steps are appropriate to persuade the Chinese to limit their appetite for the EU market or they bear the responsibility for further factory closures [and] rising unemployment,” he told reporters Wednesday in Brussels.
Francesco Marchi, director of economic affairs at Euratex, said in a Thursday telephone interview said that the association of European producers of filament fabrics plan to seek a general safeguard for their products. If the EU determined such a move was necessary, it could then negotiate a price agreement with China on the effected products, impose punitive tariffs or impose quotas, for four years.
He said the organization might also ask the EU to consider using the special textile safeguard rules, which apply only to China, for a one-year period.
An EU spokesman said, “We will examine the requests based on the merits of the case.”
As of May 1, in the enlarged 25-member EU, the textile and clothing industry will have a turnover of almost $290 billion, or 227 billion euros, and will employ 2.7 million workers, according to Euratex estimates. Dollar figures were converted from the euro at current exchange rates.
Libeert partly attributed the surge in Chinese exports of liberalized products to the EU since January 2002 to the vastly undervalued Chinese currency, coupled with China’s massive purchases of textile equipment since 2000.
He said China had become the EU’s top supplier of textiles and clothing, and noted that by the end of 2003, its exports would have reached close to $16.6 billion. That dwarfed the $574.4 million worth of textiles and apparel the EU ships to China.
The U.S. textile industry last year was successful in getting the Bush administration to agree to impose safeguard quotas on three categories of surging Chinese imports.
An EU Commission ruling is due out in the next few days on filament fabrics, Libeert said.
Libeert cited Euratex estimates that show rapid growth in China’s market share in select categories of imported apparel and fabrics that have been freed of quota restrictions. He said in 2002, China’s share of the anorak market rose from 15 to 55 percent; of the tracksuit market, 18 to 51 percent, and of the man-made fabric market, from 20 to 28 percent.
“It surely cannot be in the interests of EU manufacturing for one country to take over such a large share of imports in such as short space of time,” he said. “It makes complete nonsense of all the EU efforts in relation to sustainable trade and development and aid to those most in need.”
The Euratex official also complained that EU exporters face a range of non-tariff barriers to their efforts to ship goods to China.
Those barriers include delays in customs clearance, complex standards applied to imported goods and distribution problems.