GENEVA — As European Union Trade Commissioner Peter Mandelson arrives in Shanghai today in an attempt to defuse escalating trade tensions with China, France is getting more vocal in its demands for the imposition of European safeguards.
Mandelson is under heavy pressure from EU political leaders — spearheaded by President Jacques Chirac of France — to broker a deal to stem the surge in Chinese shipments and to regulate the trade in the sector. Mandelson is expected to hold crisis talks this weekend in Shanghai with China’s minister of commerce, Bo Xilai.
In some product categories, the EU has experienced a triple-digit increase in imports. For example, Chinese footwear imports into the EU exploded 681 percent during the first four months of 2005, intensifying calls by EU member states to find ways to cap the huge inflow.
“The French government demands the safeguard clause,” said Gerard Larcher, France’s minister of labor, in an interview in Geneva on the eve of the Sino-EU talks. Larcher stressed that “indications are all EU member states and the commission are on the same wavelength of thinking.” Larcher added that he believes the U.S. feels similarly about the situation. “We need rules to stabilize the competition,” Larcher said.
Larcher said the end of the quota regime on Jan. 1 was sudden, and unsettled local textile industry in France, Italy, Germany and other EU countries, which also sustain many other industries and service sectors.
Larcher characterized the recent French referendum regarding the proposed EU constitution, which the electorate rejected by a wide margin, as “the expression of fear or anguish by people facing a world where they don’t understand the economic and social rules.”
Other countries such as Morocco, Tunisia and Mauritius are also suffering from the surge in Chinese shipments on global markets, he said.
According to Larcher, the textile industry employs 200,000 people in France, 600,000 in Italy, 400,000 in Germany and 2.5 million in the EU as a whole.
Senior Chinese government ministers have noted that rich countries had 10 years to prepare for the phaseout of the quotas, and consider the moves by the EU and the U.S. as protectionist and not in the trade liberalization spirit of the WTO. China joined the 148-member country agency, which sets the rules on most global commerce, in December 2001.
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The aim of the Shanghai talks is to try and find “a mutually agreeable solution to deal with the market access situation in the EU following the elimination of the quota system on Jan. 1, 2005,” Mandelson’s office said in a statement. “The meeting in Shanghai is an opportunity to reach a mutually acceptable solution before the EU decides on safeguard measures in accordance with China’s WTO accession protocol.”
On May 27, the EU requested formal consultations with China on two categories, flax yarn and T-shirts, after imports of those products in the first quarter increased by 56 percent and 187 percent, respectively. If no acceptable bilateral deal is reached by the Saturday deadline, China must limit its exports in those categories by 7.5 percent above the levels imported by the EU during the previous 12 months.