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Financial Times (London, England)
August 29, 2005 Monday
London Edition 1
SECTION: FRONT PAGE - FIRST SECTION; Pg. 1
LENGTH: 509 words
HEADLINE: Mandelson urges textile quota truce
BYLINE: By EDWARD ALDEN, BEN HALL, RICHARD MCGREGOR and GEORGE PARKER
DATELINE: BRUSSELS, BEIJING, LONDON and WASHINGTON
BODY:
* EU trade chief backs formula to free customs-held Chinese goods
* Backlash by European producers feared
* Tories criticise 'absurd protectionism'
Peter Mandelson, European Union trade chief, will this week urge EU states to unblock millions of Chinese garments from customs warehouses as he seeks to force the pace towards a resolution of an increasingly acrimonious dispute.
Mr Mandelson will argue that importers and retailers have the right to receive goods ordered before a new EU quota system for Chinese imports was in place.
He said: "If the member states co-operate, I believe we will be able to unblock all the goods currently held at customs at the middle of next month." But he could face opposition from textile producers such as France, Italy, Spain and Portugal if a deal unleashes millions of extra pullovers, trousers, bras and blouses on to the European market.
Although Mr Mandelson is determined to clear an estimated 70m Chinese garments from EU ports, there is still no agreement with Beijing on how the unlicensed goods should be treated under the June 10 quota deal.
Chinese and EU negotiators begin a fifth day of talks today amid signs Beijing is using its position to drive a hard bargain.
European negotiators in Beijing propose a combination of three solutions on how to treat goods ordered by retailers that exceed import quotas:
* Exclude some blocked goods from this year's quotas on the grounds they were ordered in good faith before the quota system was fully operational
* Transfer some oversubscribed goods, such as pullovers or bras, to undersubscribed quotas for items such as cotton fabrics
* Deduct some blocked goods from next year's Chinese quota.
Chinese negotiators oppose the third option because it would lead to substantially less growth for Chinese textile manufacturers in 2006. They also argue there is little scope to use the second option since most quotas for the 10 textile categories covered by the June 10 deal are now full.
Releasing blocked textiles by removing them from this year's quotas could trigger a backlash from EU textile producers.
But Mr Mandelson is backed by free-trade member states Sweden and Denmark and by countries including the UK and Germany where retailers have a stronger voice than textile producers.
The trade commissioner, under fire in the UK press for handling the dispute from his holiday in Italy, wants a deal soon - not least to stop it overshadowing an EU-China summit next week. The talks must be finished by tomorrow when China is scheduled to re-open textile talks with the US.
Mr Mandelson's handling of the crisis was criticised by the Conservative party. David Willetts, shadow trade and industry spokesman: said: "He is clearly completely out of touch when he says this is just a glitch. Tens of millions of items of clothing are impounded all across Europe.
"And this is all because of absurd European protectionism which the British Government and Peter Mandelson should never have agreed to."
Additional reporting by Ted Alden in Washington Beijing piles on pressure, Page 4
LOAD-DATE: August 28, 2005
August 29, 2005 Monday
London Edition 1
SECTION: FRONT PAGE - FIRST SECTION; Pg. 1
LENGTH: 509 words
HEADLINE: Mandelson urges textile quota truce
BYLINE: By EDWARD ALDEN, BEN HALL, RICHARD MCGREGOR and GEORGE PARKER
DATELINE: BRUSSELS, BEIJING, LONDON and WASHINGTON
BODY:
* EU trade chief backs formula to free customs-held Chinese goods
* Backlash by European producers feared
* Tories criticise 'absurd protectionism'
Peter Mandelson, European Union trade chief, will this week urge EU states to unblock millions of Chinese garments from customs warehouses as he seeks to force the pace towards a resolution of an increasingly acrimonious dispute.
Mr Mandelson will argue that importers and retailers have the right to receive goods ordered before a new EU quota system for Chinese imports was in place.
He said: "If the member states co-operate, I believe we will be able to unblock all the goods currently held at customs at the middle of next month." But he could face opposition from textile producers such as France, Italy, Spain and Portugal if a deal unleashes millions of extra pullovers, trousers, bras and blouses on to the European market.
Although Mr Mandelson is determined to clear an estimated 70m Chinese garments from EU ports, there is still no agreement with Beijing on how the unlicensed goods should be treated under the June 10 quota deal.
Chinese and EU negotiators begin a fifth day of talks today amid signs Beijing is using its position to drive a hard bargain.
European negotiators in Beijing propose a combination of three solutions on how to treat goods ordered by retailers that exceed import quotas:
* Exclude some blocked goods from this year's quotas on the grounds they were ordered in good faith before the quota system was fully operational
* Transfer some oversubscribed goods, such as pullovers or bras, to undersubscribed quotas for items such as cotton fabrics
* Deduct some blocked goods from next year's Chinese quota.
Chinese negotiators oppose the third option because it would lead to substantially less growth for Chinese textile manufacturers in 2006. They also argue there is little scope to use the second option since most quotas for the 10 textile categories covered by the June 10 deal are now full.
Releasing blocked textiles by removing them from this year's quotas could trigger a backlash from EU textile producers.
But Mr Mandelson is backed by free-trade member states Sweden and Denmark and by countries including the UK and Germany where retailers have a stronger voice than textile producers.
The trade commissioner, under fire in the UK press for handling the dispute from his holiday in Italy, wants a deal soon - not least to stop it overshadowing an EU-China summit next week. The talks must be finished by tomorrow when China is scheduled to re-open textile talks with the US.
Mr Mandelson's handling of the crisis was criticised by the Conservative party. David Willetts, shadow trade and industry spokesman: said: "He is clearly completely out of touch when he says this is just a glitch. Tens of millions of items of clothing are impounded all across Europe.
"And this is all because of absurd European protectionism which the British Government and Peter Mandelson should never have agreed to."
Additional reporting by Ted Alden in Washington Beijing piles on pressure, Page 4
LOAD-DATE: August 28, 2005
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