BRUSSELS — The European Commission unveiled an action plan potentially worth more than $800 million annually aimed at bolstering Europe’s textile industry before the last remaining global textile and apparel quotas disappear next year.
The EC established a color-coded system for monitoring Chinese imports, with the goal of making it easier for European makers to file safeguard petitions asking for reinstatement of quotas should they prove necessary.
Under a plan set to get the approval of European Union governments in coming weeks, customs officials will be able to gather information on Chinese imports even before the products reach the EU, allowing industry or member states to respond quickly to sudden surges in imports.
“We’re going to draw up the rules of the game so that no one is taken by surprise,” EU Trade Commissioner Pascal Lamy said Tuesday.
While he said he does not think Chinese imports have reached an alarming level, “we must be ready” in case that occurs. He said the EU’s “Chinese friends” were already aware of the measures. Chinese government officials in Brussels were not available for comment.
The safeguard measures are allowed under the terms of China’s accession agreement with the World Trade Organization. China joined the WTO in 2001, seven years into the 10-year phaseout of textiles and apparel. Through 2008, WTO nations have the option of imposing renewable one-year safeguard quotas on Chinese imports in select categories if they cause market disruption to the importing nation’s domestic industry.
Textile and apparel manufacturers in the EU, U.S. and many developing nations have expressed concerns that China could quickly dominate the industry, putting at risk about 30 million jobs worldwide. Textile and apparel manufacturers employ about 2.7 million in the 25 EU nations.
Today, Chinese manufacturers produce about one-fifth of the garments consumed worldwide, and European studies have estimated that nation’s global market share could rise to 50 percent after quotas are lifted.
Currently, European customs officers gather information about Chinese imports only after the goods have arrived in the EU under a “green alert” system. The action plan would introduce three categories for imports, starting with a yellow alert allowing for a faster transmission of data from customs officials after imports reach the EU. Bumping up to yellow would allow officials to collect data on imports from the moment the products leave China.
Finally, the ominous-sounding “red alert” would allow industry or EU member states to invoke the safeguard clause against China.
“We are putting in place a mechanism to give a real possibility for textile producers in Europe to have the necessary information to present safeguard cases” when they feel threatened by China, said an EC spokeswoman.
She said the EC has held preliminary talks with member states and is confident it will win their support in a matter of weeks. The EC is expected to announce further steps to protect textile-producing nations next week, when it is set to unveil an overhaul of its 10-year system for granting trade preferences to developing countries.
The action plan unveiled Tuesday was drawn up by the EU’s high-level group for textiles and clothing, established early this year to map out ways to improve the industry’s competitiveness. The panel — with members from France, Italy, Germany and Portugal, including representatives of trade unions, manufacturers, retailers and importers — will continue to provide expertise to the EC and EU governments, even after publishing its action plan Tuesday.
The plan calls for earmarking the equivalent of $742.7 million to $866.5 million — 600 million to 700 million euros — per year from the EU’s structural funds from 2007 through 2013 to cover “unforeseen crises” in the textile industry, as well as more general goals of strengthening the fight against counterfeiting and ensuring lifelong education and vocational training for EU textile workers.
“Textiles and clothing are not, for Europeans, an industry of the past,” Lamy said. On the contrary, the sectors are industries “which can continue to combine innovation, creativity, quality and productivity. For this reason the EU will seek to maintain its comparative advantage.”