GENEVA — European Union member states on Wednesday approved an EU-China deal to unblock Chinese textiles and apparel imports held in customs warehouses because they breached agreed quota levels. But complaints continued to rage about the agreement.
“I am very pleased that member states have approved the agreement with China….This solidarity now allows the Commission to put in place the legal instrument, which should allow the member states to begin unblocking goods next week,” said Peter Mandelson, EU trade commissioner, in a statement.
Mandelson said it is anticipated this will be possible by the middle of next week.
“We’re relieved the goods will be released,” said Stuart Newman, legal adviser with the Brussels-based Foreign Trade Association, an umbrella group for importers and retailers that includes H&M, Globus, Carrefour and Metro.
“We believe the release of the goods will go smoothly,” Newman said in a telephone interview.
While satisfied the goods will be released, the FTA on Wednesday expressed its concerns that the deal agreed to on Monday in Beijing to release the blocked shipments makes no mention of goods contracted for — largely for the Christmas season — before the quotas expired on July 20. The Chinese have not been able to grant export licenses because the quotas were breached.
“At the moment, we’re completely in the dark other than the Commission saying they will look into the situation,” Newman said.
The initial EU-China import quota accord reached in June restricted import growth in 10 sensitive categories to between 8 and 12.5 percent until the end of 2007.
But European producers have blasted the terms of the deal to release the blocked items.
“We see that China is being gifted substantial additional volumes, which, for example, double the quantities available in 2005 in respect of pullovers. This will further handicap EU producers in their efforts to survive in the face of predatory Chinese prices,” said Filiep Libeert, president of the European Apparel and Textile Organization, known as Euratex.
Under the burden-sharing pact, the EU has agreed to absorb half of the blocked items — which include millions of sweaters, trousers, bras and T-shirts — with the other half to be counted against Chinese import quota limits for 2005 and 2006.
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The Chinese side has agreed to deduct from next year’s quota levels nearly 9.9 million sweaters (which will reduce its 2006 quota to 189.7 million units from 199.7 million) and 9.1 million pairs of trousers (2006 quota will be 338.9 million instead of 348 million).
In addition, some of the Chinese goods that have broken the quota to be released — including blouses, T-shirts, dresses and yarn — will be counted against China’s 2005 cotton fabrics quota, of which only about 40 percent were utilized, sources said.
As part of the pact, China and the EU also agreed “not to issue more licenses” for those categories that have exceeded the agreed import quota levels, as amended.
Both sides also agreed that the EU license issuing for goods shipped from July 20 “will be conditional upon the issuing of Chinese licenses and transmission of relevant data in principle by electronic means.”
A senior Asian trade diplomat, who spoke on the condition of anonymity, had doubts the accord would work.
“These quick quota fixes are unlikely to work,” he said. “There will be similar problems next year….At the end of the day, the Chinese decided it was better to make a deal than to stick it out.”
Ferry den Hoed, FTA president, warned Wednesday that borrowing from the 2006 quotas “will cause a similar situation to occur next year.”