GENEVA — In a spirited meeting with representatives from member states on Wednesday, European Union Trade Commissioner Peter Mandelson presented a draft proposal to release the Chinese textile and apparel shipments held in Customs warehouses.
Goods that have been blocked because they exceeded agreed quota levels include 48 million sweaters, 18 million pairs of trousers, 10 million bras, seven million T-shirts, one million blouses and 96,000 tons of yarn, sources said.
The proposal calls for the swift release of the blocked goods, but is still described as “fluid” on how the quantities would be deducted from the quotas allocated for 2006 and 2007 under the EU-China import deal reached in June.
For the Mandelson fix to fly, it requires not only securing the political support “at the highest levels” in member states, but also the support of China, which must agree to adjustments to the quota-agreement terms, sources familiar with the closed-door proceedings said.
“There’s no agreement and all options are being explored,” said a senior diplomatic source who requested anonymity.
Tensions are running high and there’s a chance that European textile producer countries could still block passage of the Mandelson proposal unless more favorable terms are included when talks resume today, sources said. Some Brussels insiders fear, however, that if too many conditions are demanded by member states, the EU-China pact could collapse.
Also still on the table is a proposal to allocate China an additional 5 percent quota for 2005 to accommodate shipments for which Chinese authorities had issued export licenses before the deal went into effect, but which arrived later. But as a trade-off, member states spearheaded by France, Italy, Portugal and Spain want China to agree to reduce shipments in some other categories.
The textile and apparel issue is also expected to be “fairly high on the agenda” at the EU-China summit to be held in Beijing on Monday, which will be attended by British Prime Minister Tony Blair and EU Commission President Jose Manuel Barroso, sources said. Britain has the rotating presidency of the EU.
“We’re happy the commission is serious about releasing the goods; however, we are concerned how much the quotas for 2006-2007 will be affected as a result,” said Stuart Newman, legal adviser at the Brussels based Foreign Trade Association, an umbrella group for importers and retailers.
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He stressed that members would not be pleased if they have to borrow from the import quota for 2006, as some retailers have already placed orders for next year.
A more favorable option, retailers say, would be to borrow from a combination of 2006-2007 quotas. However, European textile and apparel producers on Wednesday slammed the draft proposal as “unacceptable.”
The proposal “did not conform to either the industry’s requirements, to the extent that they granted substantial additional volumes to Chinese exporters and EU importers beyond the limits agreed on June 10, namely to avoid unnecessary company closures and job losses,” said Filiep Libeert, president of the European Apparel & Textile Organization.
“As the current proposals stand, Europe’s textiles and clothing industry will again be the major victim of the free gifts bestowed upon China.”