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European protectionist fiasco a lesson for the US
(China Daily)
Updated: 2005-08-31 05:53

The fourth round of talks on textile exports between China and the United States comes as the European Union dispute over Chinese textile imports intensifies.

Though the United States is not likely to suffer a similar problem given its diversified imports and preparations, the high costs of restrictions on trade demand attention from American negotiators.

Chinese and U.S. negotiators look set to make compromises in their bid to reach a deal resetting quotas of importing inexpensive Chinese apparel to the U.S. market.
Women workers sew up garments at a factory in Wuhu, East China's Anhui Province August 28, 2005. [newsphoto]

As the world's biggest textile and garment exporter, China has been fending off threats of trade limits by the United States and European Union since global quotas on the textile trade finally ended on January 1 this year.

But a surge of textile exports, a natural result of China's comparative advantage in this labour-intensive industry, has driven many rich nations to try to prolong protection for the sake of their domestic industries.

A China-EU textile agreement was signed in June. China demonstrated its consideration of some EU countries' difficulties in quickly preparing their domestic enterprises for the surge in global textile trade.

The shift would have been predicted if the scheduled removal of global trade quotas had been taken seriously by developed countries.

Enterprises in these developed countries would have tried much harder to adapt themselves to the upcoming changes if their governments had resolved to observe the new world trade order, which will obviously be fairer in the absence of the obsolete textile quota system.

The China-EU deal, as a stopgap measure, has helped alleviate the pressure on some European textile manufacturers. But this came as a surprise to European importers and retailers as well as Chinese textile exporters.

As millions of Chinese sweaters, trousers and bras piled up in ports this month after rapidly exceeding the reinstated import quotas, European importers and retailers have found themselves being penalized for not making orders in line with newly-erected trade barriers.
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