China Takes First Step for Limiting Textile Exports to the European Union
Source: EmergingTextiles Date: 2007-11-29
In order to implement the double-checking system negotiated with Brussels, Beijing just released a series of conditions for exporting to the European Union in the next year. The new rules are prefiguring some additional control of shipments in case textile exports would dramatically surge after European quotas are eliminated on 1 January 2008.
China Wednesday released requirements for exporting to the European Union in 2008.
Textile trade companies will have to comply with a series of condition for getting export licences.
Although quotas will be removed by the European Union, effective from 1 January next year, Brussels negotiated with Beijing a so-called "double-checking system" in order to strictly monitor the level in imports from China in 2008 and rapidly reimpose quantitative limits, if necessary.
Conditions for Getting Licences
Export licences will therefore be issued on China's side, but without limits and under an automated process.
A series of conditions for being granted export licences were however revealed on 17 October, leading to a possible restriction in exports to the European Union.
The system will be managed by the China Chamber of Commerce for Import and Export of Textiles, in association with the China National Textile and Apparel Council and the China Association of Enterprises with Foreign Investment.
In order to apply for export licences, Chinese companies will need complying with following requirements:
1. Have a registered capital of more than 500,000 yuan in mainland China.
2. Having exported textiles and/or apparel in the past two years. A draft document discussed in the previous days required three years of experience, finally lowered to two years.
3. Having exported textiles or clothing to the European Union worth a minimum of US$10,000 in the previous year.
4. Not having violated China's rules related to intellectual property rights or environmental protection in the past three years.
5. Being a member of the China Chamber of Commerce for Import and Export of Textiles.
What Impact?
The impact of such requirement is not easy to evaluate. New rules are a first sign that Beijing will not let exports dramatically surge in 2008 and could take other measures for limiting shipments to Europe, if necessary.
A first removal of European quotas in 2005 had led to a sharp increase in exports with Brussels finally reimposing limits and setting related embargoes at European ports.
Chinese trade associations are expected this week discussing the new system with domestic exporters and European importers at Guangdong's Commodity Fair which is currently taking place.
Under the agreement concluded with Brussels on 28 September, the double-checking system will cover eight categories of products: 4 (T-shirts), 5 (pullovers), 6 (men's trousers), 7 (women's shirts, blouses), 26 (dresses), 20 (bed linen), 31 (bras) and 115 (flax yarn).
Categories 2 (cotton fabrics) and 39 (woven table linen) are excluded, being no more considered "sensitive".
The system is set to expire at the end of 2008, in line with the end of textile safeguards granted to the European Union and the United States under China's WTO accession protocol.
