The Ministry of
Commerce called yesterday for World Trade Organization (WTO)
members, developed ones in particular, to remove textile and
apparel quotas as scheduled.
It also cautioned that US attempts to limit Chinese textile
exports would have a negative impact on bilateral trade and
economic relations.
An official from the Ministry of Commerce's Department of
Foreign Trade emphasized that there is no ambiguity in the WTO
commitments.
"If the integration of textile trade [into WTO trade framework]
cannot be realized as scheduled, it will be a reversal of the
Uruguay Round Agenda of the WTO and will greatly test the
multilateral trade system," he said.
All quotas restricting textile and clothing trade between WTO
members will be eliminated by December 31, 2004, according to the
Agreement on Textiles and Clothing reached under the General
Agreement of Tariffs and Trade (GATT) in 1994. GATT is the
predecessor of the WTO, of which China became a member in 2001.
The agreement is the result of decades of negotiations between
developed and developing members and will ultimately be conducive
to the health and sustainable development of the global textile
industry, according to the official.
"The old quota system has for a long time greatly restricted the
textile exports of developing countries, hindered their comparative
advantages and overturned the free trade principles of the WTO," he
said.
Only 30 percent of quotas have expired over the past 10 years
because of the arrangements and safeguards made by developed
countries and regions. These are the major factors causing the
current problems in textile trade, the official said.
"The road towards the integration of the global textile trade
will not be smooth, although the United States, European Union,
Turkey and Canada have vowed to lift the quotas at the proper
time," he said.
Since March, 115 textile organizations from 65 countries have
signed a declaration asking to prolong the quota.
The Chinese government also noted that the US said it will
revise regulations to accept applications from industries to impose
import limits on Chinese goods in anticipation of market
disruption. The current law allows such restrictions only when
imports have actually caused disruption.
"Accepting these applications openly disobeys WTO rules. It will
seriously hurt Chinese companies and people and influence China's
fulfillment of WTO commitments," the official said.
He denied the existence of a "China Threat," saying that China's
textile exports would not flood the world market as some have
anticipated, although short-term growth after the phase-out of the
quotas would be normal.
The rise would not be sustained over the medium and long term,
however, because of such factors as environmental issues and
insufficient supplies of raw materials and power.
The official said that China would not pursue a "more is better"
goal. "Our direction is to promote the sustainable growth of
exports of textile products," he said.
With the development of China's textile industry, its appetite
for imports of raw materials and machines will also surge. Except
cotton and wool, which are under an import tariff quota regime,
other textile products are free to enter the Chinese market.
"China's advantage is only in relatively inexpensive labor and a
complete manufacturing chain," the official said. Because it lags
developed countries in terms of research and development, brand
building and marketing, the growth of its textiles industry offers
opportunities to developed countries as well.
Chinese companies have already felt the pinch of trade
protectionism, which is likely to accelerate in 2005.
(China Daily September 24, 2004)