EU mulls import restrictions on Chinese textiles

If textiles from China begin swamping the European Union (EU), the EU's executive arm -- the European Commission (EC) -- might invoke import restrictions to protect EU industry, the EC said Wednesday.

The measure is outlined in EC guidelines on what the Commission calls "safeguard actions" against Chinese textile imports.

"The guidelines clarify under what circumstances it would consider safeguard actions against textile and clothing imports from China," the EC said in a statement.

"China, and its dramatic potential to increase exports following the lifting of quotas from 1 January this year, has become a key concern for a number of EU member states and European textiles producers," European Commissioner for Trade, Peter Mandelson, told a press conference.

"My aim is to ensure a smooth transition to a post quota world without incurring avoidable damage to our industry and vulnerable developing countries," he said.

Mandelson stressed that using safeguard measures is a last resort saying: "Adopting the guidelines does not automatically mean the EU would adopt barriers to Chinese imports."

"It is important for both China and European industry that the use of any safeguard measures is objective, transparent and based on credible data," he said.

The guidelines establish procedures and criteria for the objective and transparent use of safeguard proceedings.

"By establishing when, and on what basis, action could be taken, the guidelines provide clarity and predictability for both China and European textile producers," said Mandelson.

The guidelines establish alert zones for each category of Chinese textiles imports allowing for increases in China's current market share. To reach these alert zones Chinese exports will need to show a rapid and sustained rise over a defined period.

If these thresholds are reached, the EC, acting on its own initiative or at the request of an EU member state, will undertake an investigation.

Informal consultations with China will allow China to act to provide sufficient remedy. If no remedy is forthcoming, formal WTO consultations with the Chinese authorities would require China to limit textile exports in the affected categories.

If this is still insufficient, safeguards can be invoked. Safeguards would take the form of quantitative import restrictions applicable for a year, extendible on reapplication. These measures can only be used until 2008.

The guidelines also allow for emergency procedures in the case of a surge in imports of such a magnitude to threaten serious material injury to EU industry. In this case, formal consultation with China could be launched without a proceeding investigation.