EU warns of quotas in textile standoff with China

BRUSSELS - The European Union's executive arm called Monday for urgent talks with China on a surge in textile imports, warning that otherwise it will propose slapping quotas on two key types of textile imports.
EU trade commissioner Peter Mandelson, launching an emergency procedure allowed under World Trade Organization (WTO) rules, called for consultations with Beijing on imports of T-shirts and flax yarn.
The EU will impose "temporary" and "reasonable" limits on imports of the two sectors if China does not take voluntary action to rein in its booming exports by the end of a 90-day period, Mandelson said.
"In view of the seriousness of market disruption in these categories, formal consultations need to begin immediately," said commission in a statement.
The talks "will involve urgent discussions between China and the EU on how best to limit growth in Chinese exports in these categories.
"Under WTO rules, incorporated into Chinas accession protocol to the WTO, China is expected to use this period of consultation to propose means to manage the surge in its exports.
"Only if China does not take effective action will the Commission propose temporary limits on the growth of Chinese exports in the categories concerned in 2005," it added.
The EU commission launched a probe into nine textile and garment categories from China last month after compiling evidence that exports surged by as much as 534 percent after a 31-year-old global quota system had ended in January.
But some EU textile producers have for weeks been urging the EU to adopt emergency procedures, which would fast-forward the process to a much more serious formal consultation period.
Tuesday's new Brussels initiative comes after Chinese Premier Wen Jiabao had promised last week more measures to curb rampant growth in textile exports to the 25-nation EU.
It also comes after the United States re-imposed quotas last week on Chinese-made cotton knit shirts and blouses, cotton trousers, and cotton and man-made fibre underwear, in order to curb a flood of imports.

05/17/2005 11:14 GMT