The European Union has decided to increase quotas for Chinese
textiles when 10 more nations join the union on May 1, according to
the Ministry of
Commerce.
The new quotas cover 37 categories of textile products that are
currently under quota management among EU members, but not in the
10 new EU nations, according to a ministry official.
The EU will undergo its greatest enlargement in four weeks,
with?10 countries joining the 15-member bloc. The newcomers
are the Czech Republic, Estonia, Cyprus, Latvia, Lithuania,
Hungary, Malta, Poland, Slovenia and Slovakia.
The quota is adjusted to cover exports to the?10 new
members, said the official.
He said this is one of the trade compensations made by the EU,
as its enlargement will mean higher duties and the imposition of
quotas for exports of certain products to new members.
The increased textile quota is calculated based on an average of
Chinese exports in the past three years to the 10 new members, the
official said.
The added quota is a small fragment compared to the total amount
for the EU market.
The official stressed that textile products subject to quotas
shipped before May 1, 2004, but entering the new members on or
after the date will be granted import authorization without quota
limitation. Chinese exporters must provide adequate proof to the
authorities, such as the bill of lading.
The official also mentioned another principle for processing
trade, which is especially important for China.
“If one of the new members sends textile products to China for
processing before May 1, 2004, which are then reimported into the
same member state on or after that date, those products will not be
subject to quotas,” he said.
The textile quota adjustment is based on the revised EU
regulation on textile quotas and will be implemented among all
trading partners.
China did not file a specific request for negotiations on the
issue since textile quota limits are expected to end eight months
after EU enlargement.
Under the Agreement on Textiles and Clothing, all quotas
restricting textile and clothing trade between WTO members will be
eliminated by December 31, 2004.
Chinese exporters of garlic and mushrooms will feel the brunt of
the change, since the 10 new members will be forced to raise their
tariffs on the two farm products to conform to EU rules.
The EU has asked China to provide details on the size of its
trade in garlic and mushrooms with the new EU member states to
serve as a basis for negotiations for compensation.
The EU has agreed to offer China extra quotas on garlic and
mushrooms before May 1, said EU Commissioner for Agriculture Franz
Fischler, during a visit to China two weeks ago.
In addition to the existing quota, the EU will impose an
autonomous quota, which refers to interim import limits provided
outside the framework of the WTO.
With only weeks to go before enlargement, there may not be
enough time to conclude detailed talks on compensation for China
and the extra quotas will act as a preliminary measure to satisfy
the Chinese side, Fischler said.
China’s trade with the?10 members is small compared with
its overall European trade.
Chinese exports to the EU totaled US$72 billion dollars, while
exports to the?10 new members reached just US$6 billion.
The EU is also facing demands for trade compensation from top
trading partners such as the United States and Japan.
According to WTO rules, members have the right to seek
compensation for any trade losses incurred as a result of less
attractive terms of access to the EU than they currently have with
the new members.
However, generally speaking, EU enlargement will be a good move
for trade partners since a larger internal market will be offered,
market access to the new members will be simplified and a
substantial reduction in overall import tariffs will be seen.
Average tariff rates will decrease from 9 percent to 4 percent
in the new member states.
The EU, after enlargement, will have 450 million citizens,
account for roughly 18 percent of world trade and contribute to
more than 25 percent of the world’s gross domestic product.
(China Daily April 5, 2005)