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Textile limits imposed to ease trade concerns
By Dai Yan (China Daily)
Updated: 2004-12-12 23:29

Textile concerns among China's trading partners in the coming integration of global trade have made the nation determined to control its exports.

Ministry of Commerce spokesman Chong Quan said Sunday: "We will impose export duties on certain textile products."

The duty will be collected based on quantities of textile goods rather than on value, as a way to encourage high-end textiles, said Chong.

Th move is a key element among eight measures taken by the ministry to ensure a smooth transition to a quota-free age in global textile trade.

All quotas restricting textile and clothing trade between the World Trade Organization (WTO) members are to be eliminated by December 31, 2004, according to the Agreement on Textiles and Clothing.

Among the eights measures, Chong said governments will release textile exporting information in a timely manner, guide enterprises to export in an orderly way, and encourage industrial self-discipline.

"We will encourage Chinese enterprises to invest abroad, and provide them with policy support in their foreign investment," he said.

Public information will be available on investment increases in the textile industry to prevent investment over-heating and the overlapping of construction, he said.

Some foreign counterparts have predicted Chinese textile goods, supported by cheap labour costs, will swamp the world market and force them out of the market. About 72 textile and apparel groups from 36 countries made the "Istanbul Declaration" to urge the WTO to extend the quota-free deadline until December 31, 2007.

Foreign governments also put pressure on the Chinese Government to cap its textile exports. Grant Aldonas, the Commerce Department's undersecretary for international trade of the United States,

visited China in September to seek an agreement on voluntary caps. The European Union also urged Premier Wen Jiabao to exercise "moderation" once the import quota system is lifted on January 1. Wen met with officials during his EU trip last week.

The United States and the EU are expected to further abolish quotas on 126 items by 2005, which account for about 60 per cent and 61 per cent of their total textile imports, respectively.

In fact, the trade volume put under quota restriction accounts for about 70 per cent of total textile trade in the world, and the trade volume that is free of quota restriction is about 30 per cent.

Liang Xing, president of the Shandong Weiqiao Textile Company, said the decision is welcomed, noting it will reduce trade disputes and encourage export of high added-value.

"I prefer a steady growth rate rather than the fear of uncertainty because of a dispute," he said.

At a closed-door meeting on the post-quota period in October, an official from the Ministry of Commerce asked whether companies would support stricter industry management after quotas are lifted. Seventy to 80 per cent of the 400 company representatives present raised their hands.

China faces a "safeguard" threat, a provision in the WTO rules that allows the United States or any other WTO member, to limit imports on the grounds that its local market will be disrupted.

The Bush government agreed to consider applications made in November by members of the US textile industry to impose safeguard measures on shipments of Chinese-made cotton pants, shirts and sheets to the United States. Chinese officials believe that is an abuse of safeguard measures.

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