Textile makers hit as US and EU ponder quota
(China Daily)
Updated: 2005-04-26 08:44

Chinese textile exporters have Damocle's sword hanging over their heads, as the United States and European Union contemplate steps to safeguard their textile industries.

"We got no orders at all from US customers at the Chinese Export Commodities Fair this spring," said Guo Jiahong, an official of Yangzhou Shuaimeisi Garments Ltd, which mainly produces cotton shirts. "The number of orders from Europe was not large either."

The trading event used to see a spending spree by textile importers from the United States and the European Union.

But when the exhibition for textiles and garments at the 97th commodities fair concluded on April 20, Chinese textile exporters had only clinched deals valued at some US$896 million with the United States, down nearly 6 per cent from the previous fair last autumn, statistics from the fair revealed.

With the United States contemplating possible measures to safeguard their textile industry, the total value of contracts made at this fair dropped to US$4.68 billion, down 1.6 per cent from the previous fair.

"The US Government decided to investigate three categories of textiles imported from China just before the opening of this spring's commodity fair," said Cao Xinyu, vice-chairman of the China Chamber of Commerce for the Import & Export of Textiles.

Under the restrictions, most US importers have turned to other Southeast Asian countries for textile products .

The EU Trade Commissioner Peter Mandelson announced on Sunday that he had decided to ask the European Commission to authorize him to launch investigations into nine categories of Chinese textile exports to the EU, according to a statement released yesterday by an EU delegation to China.

The European commission complained that imports of these nine categories increased greatly in the first quarter this year, ranging from 51 per cent to 534 per cent.

The investigation is likely to result in restrictions against imports of Chinese textiles in a couple of months.

"I would attribute the increases to distorted market procedures," Cao said.

He explained that as both Chinese exporters and European importers were afraid that EU would launch restrictions similar to those of the United Sates, they hoped to fulfill more orders in the coming several months.

"For example, Chinese sweaters, which are usually sold to Europe in September or October, have seen a considerable increase in the first quarter," he said.

Therefore, Cao said, such abnormal figures should not be taken as evidence to initiate safeguard measures against China.

General Supachai Panitchpakdi, the Director of the World Trade Organization, advised these countries to stay calm in the face of strong increases in textile imports.

He was quoted by the Wall Street Journal as saying that countries struggling against a surge in Chinese textile exports should wait at least a year before taking any protection steps.

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