China Agrees With EU To Track Its Textile Exports To Europe

China agreed to let the European Union closely track its exports to Europe.

This political expediency is designed to protect European textile producers from the end of the year when the export restrictions on Chinese textiles expire.

The compromise is to solve one of the most sensitive issues in Global trade: the outside world is worried that once the export quota is lifted, China will destroy the only textile producers left in the world that can compete with it.

European Union officials said in a statement on Monday that the arrangement should help avoid repeating the mistakes of 2006.

At that time, the EU lifted the restrictions on imports of Chinese shoes, and imported Chinese shoes that poured into the European market were much higher than expected. European shoe makers complained.

The European shoe industry is on the verge of collapse, bringing the European Union into a passive situation: to protect local producers, it has to impose two years' special tariffs on Chinese imports.

China hopes that such an arrangement will remove obstacles to its products unimpeded access to Europe and the United States market.

EU producers welcomed the arrangement, but said they were also preparing for more textile products in Europe.

Francesco Marchi, head of economic affairs at European Apparel and Textile Organization, said that they had streamlined production systems and increased investment in more high-end products.

The Brussels based lobby group represents Europe's 18 textile companies.

Countries usually rely on customs data to track their imports, but these data do not need to be collected until the product reaches its home for several months.

This new arrangement will enable the EU to take precautionary measures and be able to see signs before China's textile exports increase substantially.

From January 1st next year, Chinese companies exporting products to the EU must obtain licenses issued by the Chinese government.

China has agreed to submit export information to EU officials to EU officials.

The information submitted only includes the basic situation of the type, quantity and cost of the product.

The benefit of this arrangement is to speed up the speed of information collection, says Richard Weiner, a trade lawyer at Sidley Austin, an American company.

Once the EU cancels all restrictions on textiles exported to China, including all garments, the arrangement will take effect immediately.

If the data collected indicate that products imported from China will hurt the interests of too many European enterprises, trade regulators may take action.

The European Union and the United States abolished import restrictions on Chinese textiles in 2005.

The result is a flood of textiles imported from China.

Under the pressure of domestic producers, the EU decided to extend the import quota quota for Chinese textiles until 2008.

The United States decided to maintain similar quotas until 2009.

Peter Mandelson, the European Union Trade Commissioner, said that the new arrangement could give European producers and traders the foresight and make people understand the future trend at the last stage of the liberalization of global textile and clothing trade.

EU officials said that the new arrangement would not only enhance information pparency, but also help prevent Chinese enterprises from exporting products to Europe through third countries.

Some of the textiles produced in China will be exported to Malaysia and other countries first, and then re export from there, thereby circumventing export quotas and import tariffs.

For example, after the EU imposed special tariffs on imports of footwear from China, the monthly export volume of footwear in Malaysia jumped from US $10 million 800 thousand to US $220 million, most of which were exported to the European market.

EU officials said that most of the newly increased exports were produced in China.

Retailers in the EU have been actively lobbying for the full lifting of quota restrictions. They welcomed the agreement between the EU and China to monitor China's export to Europe, but also said that the EU could not rule out the possibility of EU quotas again.

Stuart Newman, a legal adviser to the Foreign Trade Association in Brussels, said that in order to prevent a sharp increase in imports from China in 2008 and then provoke calls for re quota quotas, the association has advised companies not to buy goods from China alone.

This lobby group represents the interests of EU importers and retailers.