On 9th October the Textile Committee accepted the Commission draft proposal negotiated with the Chinese administration in favour of implementing a double-checking system for the following categories: 4 (T-shirts); 5 (Pull-overs); 6 (Trousers); 7 (Shirts); 20 (Bed linen) 26 (Dresses); 31 (Bras) and 115 (Flax). The categories concerned cover eight of the ten products which are subject to limitation until December 31st 2007 following the EU-China bilateral agreement reached by Trade Commissioner Peter MANDELSON with his Chinese counterpart Bo Xi Lai in June 2005. The ‘double checking system’ will track the issuing of licenses for export in China and the importation of goods into the EU. This monitoring system provides a clear picture of the likely development of trade patterns and ensures predictability for EU businesses.
The Member States voted in favour reaching a significant majority of votes. Regulation will be issued in the following days and some reassurances should be given by the Chinese on the way they will check trade in the respect of this new system that will end on 31.12.2008.
As the European Commission was against the requests of some member countries suggested the prolongation of the bilateral Agreement EU-China for 2008 – in the absence of quotas after the end of the year 2007, this agreement offers at least the possibility of closel monitoring of trade flows from China in these core categories, also provides the opportunity, should the need arise, to seek early redress, and thus to avoid a re-run of the events of Summer 2005.
Following the final stage of global liberalisation on January 1 2005, textile and clothing exports to Europe from China experienced a very rapid surge accompanied by very rapid drops in unit prices. This surge caused serious damage to many EU producers and precluded any realistic possibility of EU producers adapting to new levels of competition. The EU and China negotiated a Memorandum of Understanding that would cap imports from China at agreed levels each year until 31 December 2007. The Memorandum also committed both sides to working for a smooth transition to free trade in textiles in 2008.