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Europe’s textile and clothing industry warns of China challenge

During a press conference organised in Brussels last week by the European Apparel and Textile Organisation, the president of Euratex, Mr Filiep Libeert stressed that Chinese accession to the World Trade Organisation at the beginning of 2002 brought obligations as well as rights for that country. “The accession of China was an important event. It brought a giant economy of the near future and today’s largest textile and clothing industry into the rules-based international system. It offers opportunities to EU textile and clothing exporters who already exported Euro 416 million to China in 2002 to further expand their sales, at the same time as it posed a challenge where imports were concerned.” he stated.

Mr Libeert noted that even in 2003 there was evidence that China was not yet living up to its commitments in full, and a range of non-tariff barriers still existed including delays in customs clearance, high reference prices for the assessment of customs duties, costly and complex standards applied to imported goods, and distribution problems within the country. China must dismantle any remaining barriers and also comply with intellectual property rights legislation and crack down hard on counterfeiting and copying of designs.

In relation to the massive growth in Chinese exports of liberalised products to the EU since January 2002, Mr Filiep Libeert agreed that it was no exaggeration to state, as had the Commission in its Communication to the Council dated October 29, 2003, that “The sharp unit price drops and the expansion of market share, which in some individual categories has multiplied several times over with average unit price reductions of up to 75 per cent, deserve scrutiny as to the conditions under which such performance has been achieved”.

For his part he believed that the renmimbi was vastly undervalued. Bank lending rates of approximately one per cent, assuming borrowed money ever had to be reimbursed, must also greatly contribute to this phenomenon, together with China’s massive purchases of textile machinery since 2000. The Euratex president believed that industry’s safeguard clause request against Chinese exports of filament fabrics constituted a test case. Here a prompt and unambiguous response was required. “It surely cannot be in the interests of EU manufacturing for one country to take over such a large share of imports in such a short space of time. It makes complete nonsense of all the EU’s efforts in relation to sustainable trade and development, and aid to those most in need” he stressed. In the wider context the Commission and member-states were faced with a clear choice between the defence of the legitimate interests of an important element of its manufacturing industry or inevitable closures and rising unemployment. For its part Euratex wished to engage in a constructive dialogue to define the most appropriate solutions.

Euratex represents the textile and clothing industries of the EU, the new member-countries and Turkey. As of May 1 2004, the textile and clothing industry of the enlarged European Union will have a turnover of Euro 227 billion, and provide 2.7 million jobs.

Source: The Woolmark Company 2004.