COMMISSION OF THE EUROPEAN COMMUNITIES 
Brussels, 09.03.1998 
COM(1998) 128 final 
3rd REPORT 
from the Commission 
on the quantitative quotas 
and 
surveillance measures 
applicable to certain non-textile 
products originating in the 
People's Republic of China 

Table of contents 
INTRODUCTION Page 
A. Historical background p. 3 
B. Objective of the Commission report p. 3 
C. Methodology p. 4 
CHAPTER 1 - Implementation of the quantitative restrictions p. 5 
I. Background and evolution since the previous report p. 5 
II. Management of the quotas p. 6 
III. Developments in the trade of the products subject to quantitative p. 8 
restrictions 
CHAPTER 2 - Should Community quotas be maintained? p. 12 
I. Approach adopted by the Commission p. 12 
II. Analysis of the sectors concerned p. 13 
1. Footwear p. 13 
2. Porcelain or china tableware and ceramic tableware p. 17 
3. Toys p. 26 
III. Conclusions p. 30 
CHAPTER 3 -Implementation and maintenance of surveillance measures p. 32 
I. Purpose of surveillance measures p. 32 
II. Implementation p. 32 
HI. Trends in imports of products under surveillance p. 33 
IV. Should surveillance measures be maintained? p. 34 
CHAPTER 4 - Conclusions and proposals of the Commission p. 35 
INTRODUCTION 
A. Historical background 
By Regulation (EC) No 519/94 of 7 March 1994, the Council of the European Union 
introduced Community-wide quantitative restrictions on 7 categories of products 
originating in the People's Republic of China, namely gloves, footwear, porcelain 
tableware, ceramic tableware, glassware, car radios and toys, and certain surveillance 
measures. 
The introduction of such measures had been agreed, in principle, by the Council in 
December 1993 as part of a global package including acceptance of the Uruguay 
Round results, reinforcement of the trade policy instruments and completion of the 
common commercial policy. 
The latter aspect of the package involved the unilateral elimination of 6.417 national 
quantitative restrictions (of which some 4.700 concerning Chinese products) and the 
introduction of Community-wide quotas on imports from China of a limited number 
of sensitive products, whose imports were at that time subject to national restrictions. 
The introduction of such quotas was based on the following considerations : 
a) the sensitivity of the Community industries concerned; 
b) the increasing threat posed by imports from China to these industries, made 
more acute by the particular characteristics of the Chinese economy. 
B. Objective of the Commission report 
In the course of discussions in the Council on Regulation (EC) No 519/94, the 
Commission made the following statement which was included in the minutes : 
"The Commission will report to the Council before 31 December 1995 and before 
the 31 December of every year thereafter on the implementation of the surveillance 
measures and the quantitative restrictions provided for in Annexes II and III, the 
need to maintain such measures, and will propose, as the need arises, the 
appropriate adjustments. " 
Like the first two reports (doc COM(95) 614 final of 6 December 1995, and doc 
COM (97) 11 final of 29 January 1997), this third report is in response to the above-
mentioned commitment. 
C. Methodology 
1. The report first reviews the implementation of the quantitative restrictions, including 
the problems raised by their administration. 
In its second chapter, it addresses the question of the need to maintain the 
quantitative restrictions introduced by the Council. To this end, the Commission 
examined whether the conditions which justified the introduction of these measures 
in 1994 are still present, in particular: 
a) the situation of the Community industries concerned, and 
b) the sensitivity of these industries to Chinese imports. 
This examination was conducted sector by sector. 
The implementation of the surveillance measures and the need to maintain them is 
dealt with in the third chapter. 
The fourth chapter presents, on the basis of the above analysis, the Commission 
conclusions. 
2. As in the previous years, the Commission faced considerable difficulties with regard 
to the collection of statistical and factual data on the industries concerned, as well as 
on the development of the Chinese export potential. In particular, it should be noted 
that not all sectors concerned provided detailed information nor did they make 
known their position as clearly as in previous years. 
Regarding information on the state of the Community industry, these difficulties 
were amplified by the fact that producers generally produce a wide range of 
products, not just those subject to quota, and that nearly all these sectors are made up 
of many small and medium-sized enterprises, of which a significant proportion are 
not even known by the relevant national federations. 
On the importers' side, the Commission received information of a general nature 
from only a small number of associations or individual importers. 
It should also be noted that once more only one Member State, the United Kingdom, 
submitted factual data and comments to the Commission for the purposes of this 
report. 
3. In general, the analysis is based on figures for 1996, as full statistics for 1997 were 
not available at the time of the drafting of this report. However, trends for 1997 have 
been used, where possible. 
CHAPTER 1 
IMPLEMENTATION OF THE QUANTITATIVE RESTRICTIONS 
I. Background and evolution since the previous report 
1. Since their entry into force in March 1994, the quotas have been modified on a 
number of occasions in order to balance the objective of ensuring an appropriate 
protection of the Community industry concerned with that of maintaining trade 
flows with the People's Republic of China: 
- In July 1994, the Council decided to increase the 1994 level of the quota on certain 
toys. 
- In March 1995, the quotas were further increased to take account of the accession 
of Austria, Finland and Sweden. 
- In April 1996, following the conclusions contained in the Commission's first annual 
report on the implementation of the quotas, the Council decided by Regulation 
(EC) No 752/96 to relax further the quota regime vis-à-vis China: 
• the quotas on 3 products (gloves, car radios and combined car radios) were 
liberalized; 
• the 3 toy quotas were merged into one quota, to give more flexibility to traders 
and allow them to react more rapidly to market changes; 
• the remaining quotas were increased (ceramic and porcelain tableware and 
glassware by 5% and certain footwear by 2 %). 
- In October 1996, Council Regulation (EC) No 1897/96 excluded glass-fronted clip-
frames from the quota applicable to glassware. 
- Finally, as a result of Council Regulation (EC) No 847/97 of 12*May 1997, which 
implemented the Commission's proposals included in its 2nd annual report: 
• imports of toy parts and accessories have been liberalized; 
• the quota on glass tableware will be removed as from 1 January 1998. 
II. Management of the quotas 
a) Legal basis and objectives 
1. The management of Community quotas is based on Council Regulation (EC) No 
520/94 of 7 March 1994 establishing a Community procedure for administering 
quantitative .quotas and Commission Regulation (EC) No 738/94 of 30 March 
1994 laying down certain rules for the implementation of Council Regulation 
(EC) No 520/94 (mostly concerning procedural aspects, including the common 
import licence form). 
It should be recalled that before the adoption of Regulation (EC) No 520/94, 
quotas were allocated among Member States, and not directly to importers. 
Since the reform of March 1994, uniform criteria, determined by the 
Commission after consultation of the Management Committee, apply to all 
Community importers, in conformity with the principles of the Single Market 
and the relevant case law of the European Court of Justice. 
2. In the management of the quotas, the Commission has been guided by the 
following principles : 
that administrative procedures would not add to the intended effect of the 
quotas on trade and that the available quantities would be fully used; and 
that non-discrimination among all Community importers, no matter where 
they are established and no matter where they submit a licence application 
would be ensured. 
b) Functioning of the quota management system 
1. In conformity with the above-mentioned principles, the Commission felt it 
appropriate to resort to the first allocation method provided for by Regulation 
(EC) No 520/94, i.e. the method based on traditional trade flows, which 
guarantees that "traditional" importers receive at least a part of their previous 
trade performance realized during a reference period, while ensuring a fair 
access to the quotas to non-traditional importers. 
This allocation method, while it would appear to have worked satisfactorily, still 
raises however certain practical problems in relation to the choice of the 
reference period and the determination of the relative shares set aside for 
traditional and for other importers respectively. 
In addition, the management of the part of the quotas set aside for the non-
traditional importers raises a problem. The chronological method ("first come, 
first served"), whose use for the management of the 1994 quotas did not prove 
practicable, has been replaced by the third method provided for by Regulation 
(EC) No 520/94, i.e. the method of proportional allocation to the quantities 
requested. The problem resulting from the unrestricted access to that part of the 
quota however remains. In 1994, 1^2 232 import licence applications were 
submitted by non-traditional importers; this figure grew to 21 926 applications 
for the first tranche of 1995, to 19 613 for the second tranche (with fewer 
product quantity to be allocated), to 28 204 applications for the allocation of the 
1996 quotas. While last year the number of applicants for the 1997 allocation 
decreased to 19 708, this year the number of applicants has increased to 21 439, 
and considering that the number of products under quota has been further 
reduced, the problem remains. This extremely high number of applications 
results in those non-traditional importers being allocated more and more limited 
quantities, a fact which may lead to underutilization of the quotas. However,, this 
trend has been partly corrected by the 5% increase of the portion of the quotas 
reserved for non-traditional importers, which will allow them to be granted, for 
1998, similar quantities than in previous years despite the increase of applicants. 
In the management of the quotas, the Commission made every effort to satisfy 
the wish of importers to receive information as early as possible on their 
allocation for the following period. To this end, the Commission opened the 
allocation procedures for the 1998 quotas well before the beginning of the quota 
year, in July 1997, and allowed importers to introduce their applications during 
2 months, until September 1997. 
8 
The 1998 management rules currently provide for a 12-month validity of the 
import licences. Moreover, the unused 1997 quotas will be redistributed during 
1998. The Commission considers that the quantities redistributed from the 
previous year should be kept separate from the current annual quota. The 
licences allocated in the redistribution exercise, therefore, have been set to 
expire one month earlier than the regular quota licences, in order to avoid a 
"snow-ball" effect towards the end of the year. This differentiated date of expiry 
has raised strong concerns by several Member States which are currently the 
subject of an examination involving the Commission's Legal Service. 
Concerning the administrative procedures, the Community management system 
is based on a "single-stop" approach, whereby all Community importers, 
irrespective of where they are established in the Community, may submit a 
licence application to the competent authority of the Member State of their 
choice, and obtain an import licence which is valid throughout the Community. 
In addition, the application procedure has been made as simple as possible and 
the formalities reduced to a strict minimum; the licencing process is totally free 
of charge for the Community importers. 
c) Conclusion 
As is unavoidable when trade is subject to restrictions, the management of these 
quotas raised some problems, such as the selection of the reference year for 
traditional importers and the different duration of the redistribution licences 
compared to the regular annual quota licences. The Commission considers, however, 
that the system adopted has on the whole worked well, thanks to the cooperation of 
Member States. In particular, it is felt that any (legitimate) concerns that the 
management system should not add to the effect of the quotas, as decided by the 
Council, have been met. 
III. Developments in the trade of the products subject to quantitative restrictions 
The following two tables give a factual summary of the developments in the trade of 
each product subject to quantitative restrictions, both in terms of volume and value. 
a) Evolution in volume of the products concerned (imports and quotas) 
Products 
rubber and plastic 
uppers shoes 
(6402 99) 
leather shoes 
(6403 51 &59) 
leather shoes 
(6403 91 &99) 
textile shoes 
(6404 11) 
textile shoes 
(6404 19 10) 
total shoes Unit 
pairs 
pairs 
pairs 
pairs 
pairs 
pairs Imports 
1993 
37 894 757 
3 942 271 
36 215 974 
20 853 012 
31 039 693 
129 945 707 1994 
35 270 099 
(9 989 423 hi-
tech incl.) 
2 602 553 
30 610 418 
(14 122 199 hi-
tech incl.) 
22 607 883 
(6 288 335 hi-
tech incl.) 
25 672 115 
116 763 068 
(33 361 807 hi-
tech incl.) 1995 
27 050 401 
(1 517 290 hi-
tech incl.) 
1 241 989 
15 621 517 
(10 331 353 hi-
tech incl.) 
14 043 417 
(4 466 577 hi-
tech incl.) 
18 892 609 
76 849 933 
(21 223 220* 
hi-tech incl.) 1996 
48 845 047 
(6 344 717 hi-
tech incl.) 
1 395 015 
18 539 881 
(17 561 189 hi-
tech incl.) 
21 318791 
(15 975 984 hi-
tech incl.) 
14 089768 
104 188 502 
(39 881 890 hi-
tech incl.) Quotas 
1996 quotas 
(annual basis) 
39 151 481 
(hi-tech not 
included) 
2 795 000 
12 120 000 
(hi-tech not 
included) 
18 228 780 
(hi-tech not 
included) 
31 897 716 
104 192 977 
(hi-tech not 
included) 1997 quotas 
(annual basis) 
39 151481 
(hi-tech not 
included) 
2 795 000 
12 120,000 
(hi-tech not 
included) 
18 228 780 
(hi-tech not 
included) 
31 897 716 
104 192 977 
(hi-tech not 
included) unused 
quantities 
in 1996 
9 242 791 
1 337 516 
2 928 143 
6 804 272 
16 239 641 
36 552 363 
-figures on hi-tech shoes from Community surveillance are based on surveillance documents issued, which do not necessarily reflect actual levels of imports 
-figures on unused quantitites based on import licences returned to the Member States • 
(*) including 4.908.000 pairs for Italy, for which the breakdown by category is not known. 
-Q 
Products 
porcelain 
tableware 
(691110) 
ceramic 
tableware 
(691200) 
stuffed toys 
(9503 41) 
toys (9503 49) 
toys (9503 90) 
total toys Unit 
tonnes 
tonnes 
ECU 
ECU 
ECU 
ECU Imports 
1993 
42 300 
36 686 
302 917 000 
171 339 000 
678 942 000 
1 153 208 000 1994 
50 045 
38 910 
246 564 000 
87 263 000 
472 977 000 
806 804 000 1995 
31966 
26 372 
179 717 000 
45 853 000 
309 862 000 
535 432 000 1996 
34 742 
28 454 
207 330 000 
65 177 000 
345 325 000 
617 832 000 Quotas 
1996 quotas 
(annual basis) 
45 800 
34 650 
NA(1) 
NA(,) 
NA(1) 
1 056 996 632 1997 quotas 
(annual basis) 
45 800 
34 650 
NA(1) 
NA(I) 
NA(1) 
1 056 996 632 unused 
quantities 
in 1996 (*> 
10 756 
7 823 
NA(1) 
NA(1) 
NA(1) 
319 850 908 
Source :-EUROSTAT 
(*) figures on unused quantities based on import licences returned to the Member States 
(J) breakdown no longer available because of merger of the quotas 
b) Import prices of products originating in China 11 
Product Unit price in 1994 Unit price in 1995 Unit price in 1996 
Footwear: 
- 6402 99 
-6403 51 
- 6403 59 
- 6403 91 
- 6403 99 
- 6404 11 
-6404 19 10 3.78 
11.85 
3.26 
10.14 
8.02 
4.30 
0.90 ECU/pair 
ECU/pair 
ECU/pair 
ECU/pair 
ECU/pair 
ECU/pair 
ECU/pair 4.22 
6.74 
3.17 
11.20 
9.25 
7.13 
0.83 ECU/pair 
ECU/pair 
ECU/pair 
ECU/pair 
ECU/pair 
ECU/pair 
ECU/pair .4.81 
7.56 
3.04 ECU/pair 
ECU/pair 
ECU/pair 
12.15 ECU/pair 
9.54 
8.31 
1.11 ECU/pair 
ECU/pair 
ECU/pair 
Porcelain tableware(*): 
6911 10 1 012.34 ECU/tonne 1 070.03 ECU/tonne 1 149.61 ECU/tonne 
Ceramic tableware(*): 
6912 00 1 077.59 ECU/tonne 1 077.92 ECU/tonne 1 212.91 ECU/tonne 
Toys : 
- 9503 41 
- 9503 49 
- 9503 90 7316 
6113 
4 924 ECU/tonne 
ECU/tonne 
ECU/tonne 6 247 
5 987 
4 909 ECU/tonne 
ECU/tonne 
ECU/tonne 7 148 
5 618 
5 308 ECU/tonne 
ECU/tonne 
ECU/tonne 
Source : EUROSTAT 
12 
CHAPTER 2 
SHOULD COMMUNITY QUOTAS BE MAINTAINED? 
I. Approach adopted by the Commission 
To reply to this question the Commission sought to find out if the conditions that had 
provoked the introduction of quantitative restrictions in 1994, namely the sensitivity 
of the Community industries concerned and the threat posed by Chinese products to 
them, still prevailed. 
It did this by carrying out a sector-by-sector analysis on the basis of the following 
economic indicators: 
1. Structure of the industry 
2. Production 
3. Employment 
4. Import trends 
5. Import prices 
6. China's export potential 
13 
II. Analysis of the sectors concerned 
Footwear 
CN 6402 99; 6403 51 and 59; 6403 91 and 99; 6404 11; 6404 19 10 
A. Situation of the Community footwear industry 
1. Structure of the industry 
This year's trends followed those of earlier years: in the south of the EU the 
number of producers has remained more or less stable, but there have been further 
closures in the north. The number of undertakings in this sector has continued to 
decrease. 
2. Community production 
Despite a 4% increase in exports, production fell slightly in 1996. It was strongly 
affected by the fall in sales within the Community, where EU producers' share of 
the market fell by 3%. 
1000 pairs 
Production 
Exports 
Consumption 
Sales/Community 
production on 
internal market 
Market share of 
Community 
production 1993(x) 
1 090 166 
291 889 
1 529 857 
798 277 
52% 1994 (x) 
1 107 140 
339 687 
1 524 135 
767 453 
50% 1994(xx) 
1 124 532 
NA 
N A 
N A 
NA 1995(x) 
1 087 305 
298 528 
1 504 666 
788 777 
52% 1995(xx) 
1 104 339 
306 575 
1 545 934 
797 764 
52% 1996 (xx) 
1 097 266 
319 054 
1 594 863 
778 212 
49% 
(x) EUR 12 -(xx) EUR 15 
Full and comparable specific figures for products under quota are not available, 
but the general trends outlined below give a fairly representative idea of how they 
fared. 
Employment 
In 1996 there were a further 6000 job losses in the Community of Fifteen in this 
sector. 
Numbers directly 
employed EUR 12 
Numbers directly 
employed EUR 15 1993 
320 405 1994 
317 990 
325 436 1995 
312 102 
319416 1996 
306 271 
313 666 
14 
N.B. : Under the altered nomenclature (PRODCOM), the employment statistics 
now cover a broader sector. The 1993 and 1994 figures have been extrapolated to 
take account of the changes and provide a valid comparison between the new and 
older statistics. 
4. Current restructuring 
Restructuring of the industry over the last few years has begun to bear fruit and 
productivity is increasing. The sector also became more competitive thanks to 
quality improvements, diversification and greater use of automation and 
information technology. However, it has become clear that it is essential for 
Community products to obtain better access to non-Community markets if the 
industry is to continue modernising and restructuring. 
B. Sensitivity to Chinese imports 
1. Import trends 
1996 Community footwear imports from all origins totalled 816 651 000 pairs, 
approximately 8 % up on 1995, and accounted for 51% of the Community 
market. 
The table below shows import trends from different supplier countries from 1993 
to 1996. 
1000 pairs 
Non-EC total 
China 
Indonesia 
Vietnam 
Thailand 
Taiwan 
India 
Brazil 
South Korea 1993 (x) 
731 580 
296 700 
86 673 
32 752 
61 118 
21 538 
18 393 
23 209 
30410 1994 (x) 
756 682 
301 406 
104 192 
58 064 
51 336 
17 278 
20 989 
17811 
20 462 1995 (x) 
715 889 
280 143 
99 601 
74 915 
35 937 
19 690 
19 209 
14 834 
14 288 1995 (xx) 
748 170 
295 072 
102 476 
76 757 
37 717 
20 725 
19 650 
15 375 
15 345 1996 (xx) 
816 651 
337 484 
99 798 
97 165 
32 268 
21 992 
21 779 
12 976 
9113 
(x) EUR 12-(xx) EUR 15 
68 million more pairs were imported in 1996 than in 1995, with 42 million of the 
increase accounted for by China and 20 million by Vietnam. 
Imports from China fell in 1995, but rose again by 13 % in 1996, demonstrating 
the capacity of Chinese exporters to adapt to Community quota conditions. 
Chinese imports accounted for 41% of all footwear imports into the Community 
in 1996, and their share of the EC market was 21%, 2% up on 1995. 
The following table shows overall trends in EC footwear imports from China: 
15 
1000 pairs 
Quota footwear 
Non-quota 
footwear 
Total 1993(x) 
137 679 
159 021 
296 700 1994(x) 
117 141 
184 265 
301 406 1995(x) 
71 611 
208 532 
280 143 1995(xx) 
77 073 
217 999 
295 072 1996(xx) 
104 690 
232 794 
337 484 
(x) EUR 12 -(xx) EUR 15 
The main increase is in imports of quota footwear (+ 26% as opposed to + 6% for 
non-quota footwear). 
This renewed increase in quota footwear imports from China breaks down by 
tariff heading as follows: 
pairs 
6402 99 
6403 51 and 59 
6403 91 and 99 
6404 11 
6404 19 10 1993(x) 
33 498 463 
3 030 80i 
24 860 632 
23 849 323 
34 789 708 1994(x) . 
35 292 487 
2 602 553 
30 638 814 
22 662 404 
25 944 728 1995(x) 
24 270 835 
1 100 882 
14 857 004 
12 717 094 
18 664 920 1995(xx) 
27 083 126 
1 241 996 
15 652 049 
14 182 196 
18 914 149 1996(xx) 
49 133 985 
1 395 151 
18 594 437 
21 410712 
14 155 867 
(x)EUR12-(xx)EUR 15 
Between 1995 and 1996 imports of quota footwear under CN code 6402 99 
(rubber/plastic) rose very sharply, by more than 80 %, while imports under CN 
code 6404 11 (textile) also rose by more than 30 %. Only imports of slippers 
(textile soles, CN code 6404 1910) fell between 1995 and 1996, by 25%. 
2. Import prices 
As a result of the recent anti-dumping investigations, dumping margins were 
established at 133 % for footwear with textile uppers and 47.6 % for shoes with 
leather/synthetic uppers. 
Comparing average footwear prices for imports from China and exports from the 
Community gives some idea of the huge gap between Chinese and Community 
prices: 
ECU/pair 
Product 
6402 99 
6403 51 
6403 59 
6403 91 
6403 99 
6404 11 
6404 19 10 China 
EU 
China 
EU 
China 
EU 
China 
EU 
China 
EU 
China 
EU 
China 
EU 1993(x) 
3.68 
5.98 
9.76 
21.19 
3.30 
16.64 
9.54 
18.71 
7.45 
14.12 
3.94 
8.80 
1.00 
4.12 1994(x) 
3.78 
6.44 
11.86 
21.68 
3.26 
16.43 
10.14 
19.72 
8.02 
14.51 
4.31 
9.32 
0.89 
4.12 1995(x) 
4.25 
6.24 
6.66 
21.04 
3.00 
18.11 
11.27 
20.25 
9.31 
14.62 
7.19 
10.73 
0.82 
4.00 1995(xx) 
4.22 
6.36 
6.74 
21.06 
3.17 
18.13 
11.17 
20.87 
9.25 
14.69 
7.17 
10.72 
0.83 
4.03 1996(xx) 
4.81 
6.70 
7.59 
21.59 
3.05 
21.84 
12.15 
21.20 
9.54 
15.03 
8.32 
12.40 
1.11 
4.21 
(x) EUR 12-(xx) EUR 15 
16 
As in previous years, most average prices per pair for imports from China were 
lower in 1996 than those of any of the Community's other principal suppliers. 
However, they remained almost unchanged in relation to 1995 levels. The same 
applies to price differences per pair for the different categories of footwear. 
C. Conclusion 
The footwear sector is still particularly sensitive to imports from China because of 
their volume, their large share of the Community market, the extremely wide 
price gaps and the export potential of Chinese producers. Furthermore, the fall-off 
in quota imports in 1995 was very short-lived and was reversed by the 26 % 
increase in 1996. It therefore seems that there is still a need to keep the growth of 
Chinese imports under control. 
17 
Porcelain or china tableware and ceramic tableware 
CN 6911.10 and CN 6912.00 
Statistics and detailed information on the two positions under quota are difficult to 
obtain, since most producers produce a wide range of tableware products which, when 
they are reported, are usually reported as "tableware", that is, CN 6911 + 6912 + 6913 
combined, and also because producers are usually reluctant to disclose what they 
consider to be commercially sensitive information to their federations. Moreover, in the 
tableware sector, there are many very small producers which are not members of any 
national federation. 
A. Situation of the Community tableware sector 
1. Structure of the industry 
Whilst output in the tableware sector typically represents about one tenth of total output 
of the EU ceramics industry in value terms, it accounts for something like a quarter in 
terms of numbers employed. It is the most labour intensive of the six ceramics 
sub-sectors, and is therefore particularly sensitive to the effects of low-priced 
competition. 
The sector is made up of some big producers, such as Villeroy & Boch of Germany, and 
Royal Doulton and Wedgwood of the UK, the three biggest producers in the world, but 
also a large number of very small and medium-sized enterprises. These producers have a 
vast range of products, which differ greatly between producers and depend to a large 
extent on public taste and disposable income. 
Originally, production of ceramic products was built up near to the source of raw 
materials, and energy, and where transport facilities were good. These are no longer the 
primary deciding factors, but the sector is still very concentrated geographically, with, for 
example, big concentrations in Staffordshire in the UK, the Limousin in France, northern 
Bavaria in Germany, and Maastricht in the Netherlands. 
2. Trends in production and apparent consumption 
The figures given below are estimates of production, etc, for EUR 12 and EUR 15. They 
apply to all ceramics sectors. 
Production 
Exports 
Extra-EU 
Imports 
Extra-EU 
Apparent 
Consumption 
EU sales on 
domestic 
market 
EU market 
share 
Imports 
market share 
Direct 
employment 
N° companies 1993 
EUR 12 
21216.2 
3667.2 
1259.4 
18808.4 
17595.2 
93.55% 
6.45% 
292889 Units: million ECU 
1994 
EUR 12 
22187.4 
4217.4 
1342.1 
19312.1 
17981.5 
93.11% 
6.89% 
280586 1995 
EUR 12 
22581.3 
4475.4 
1360.5 
19466.4 
18105.9 
93.01% 
6.99% 
279270 EUR 15 
26081.4 
4234.2 
1323.1 
23170.3 
21847.3 
94.29% 
5.71% 
322386 
c2000 1996 
EUR 15 
25506.9 
4614.4 
1396.5 
22289.0 
20884.8 
93.7% 
6.26% 
n/a. 1 
Import and export figures above for EUR 12 and EUR 15 are taken from COMEXT. 
Production and employment figures come from the DEB A database (Eurostat: 1995 and 
1996 for EUR 15 using NACE Rev. 1, 26.2 + 26.3 + 26.4.). 
In comparison, similar information on tableware 
CN 6911 + 6912 + 6913 Units: million ECU 
Production 
Exports 
Extra-EU 
Imports 
Extra-EU 
Apparent 
Consumption 
EU sales on 
domestic 
market 
EU market 
share 
Imports 
market share 
Direct 
employment 
N° companies 1993 
EUR 12 
3400** 
901.4 
544.7* 
659.0 
370.0* 
3157.6 
2498.6 
79.1% 
20.9% 
90 000 
170(6911) 1994 
EUR 12 
3000** 
1002.6 
653.9* 
677.0 
399.3* 
2674.4 
1997.8 
74.7% 
25.3% 
81 000 1995 
EUR 12 
2800* 
1043.4 
705.6* 
651.7 
377.6* 
2408.3 
1755.6 
72.9 
27.1% 
80 000 EUR 15 
2850** 
959.9 
650.8* 
678.9 
395.0* 
2569.0 
n/a 
n/a 
n/a 
n/a 1996 
EUR 15 
2800** 
1014.8 
710.5* 
736.7 
448.8* 
2521.9 
n/a 
n/a 
n/a 
75000** 
j y 2 * * * 
Source: imports/exports from COMEXT 
19 
production and employment from Cérame-Unie 
* CN 6911.10 + 6912.00 
* * estimate by Cérame- Un ie 
* * * number of tableware producers which are members of Cérame- Unie 
As is evident from the figures above, import penetration for all ceramic products together 
is not significant, except that it must be borne in mind that Europe is a strong traditional 
exporter of ceramic products, and exports form an integral and indispensable part of 
many European companies' order books. 
It should be further noted that the Chinese share of extra-EU imports of all ceramic 
products has been climbing steadily, and accounted for 17.2% in 1996 (in value terms). 
This is alarming the EU ceramics industry, since at present, the Chinese export very 
small quantities of tiles to the EU, but they have been equipping massively over recent 
years, and have now overtaken Spain and Brazil to become the world's second biggest 
producer, after Italy. Imports of Chinese tiles into the EU are expected to increase 
drastically in the next few years. 
3. Employment trends 
Numbers employed in the ceramics industry have been decreasing steadily in recent 
years, as can be seen from the table below: 
WO 
Total ceramic Tableware Tableware as 
1993-EUR 12 
1994-EUR 12 
1995-EUR 15 
1996-EUR 15 industry* 
293 
281 
322 
n/a sector 
90 
81 
80 
75 % of total 
30.7 
28.8 
24.8 
n/a 
* includes coarse ceramics - refractory products, building bricks 
and roof tiles. 1996 figure is estimated by Cérame-Unie. 
Figures for the total industry employment come from the DEBA/EUROSTAT database; 
figures for the tableware sector are Cérame-Unie estimates. 
It is not easy to determine how much of the decline in employment in this sector is a 
direct result of growing imports of low-priced Chinese tableware, but there is no shortage 
of examples of closures or relocations where the existence of cheap imports have played 
a major role in the decision making process. 
N.B. Numbers employed in the ceramics industry as a whole went down by an 
estimated 12.7% between 1992 and 1995; numbers employed in the 
tableware sector went down by an estimated 28.6% over the same period. 
20 
B. Sensitivity to Chinese imports 
1. Trends in imports and exports 
As mentioned above, exports are very important for EU tableware producers, many of 
whom generally export up to 30% of their production, although the quantity of tableware 
exported is generally well below import levels. The tables below show the trend of 
imports in the EU, and its biggest export markets in 1996. 
Evolution of Imports: EUR 15 Source: COMEXT 
CN 6911.10 
China 
Poland 
Czech Rep. 
Romania 
Hong Kong 
Philippines 
Bulgaria 
Thailand 
Indonesia 
others 
Total 1995 
Tonnes 
31965.9 
17054.7 
12823.6 
7842.9 
4642.0 
3995.0 
3757.6 
2687.0 
3253.5 
20502.2 
108524.4 % total imports 
29.46 
15.72 
11.82 
7.23 
4.28 
3.68 
3.46 
2.48 
3.00 
18.89 
100.00 1996 
Tonnes 
34742.3 
21026.6 
14330.7 
8537.2 
4885.2 
4974.7 
3744.0 
3482.2 
2554.4 
22038.0 
120315.3 % total imports 
28.88 
17.48 
11.91 
7.10 
4.06 
4.13 
3.11 
2.89 
2.12 
18.32 
100.00 
CN 6912.00 
China 
Poland 
Czech Rep. 
Romania 
Hong Kong 
Philippines 
Bulgaria 
Thailand 
Indonesia 
Others 
Total 1995 
Tonnes 
26371.7 
10251.3 
995.7 
6415.4 
913.0 
1210.9 
707.8 
14476.0 
5162.8 
36096.6 
102601.2 % total imports 
25.70 
9.99 
0.97 
6.25 
0.89 
1.18 
0.69 
14.11 
5.03 
35.18 
100.00 1996 
Tonnes 
28454.6 
9716.3 
1366.6 
7063.4 
706.8 
2016.8 
488.4 
9695.0 
4657.0 
43892.0 
108056.9 % total imports 
26.33 
8.99 
1.26 
6.54 
0.65 
1.87 
0.45 
8.97 
4.31 
40.62 
100.00 
21 
Exports in 1996: EUR 15 Source: COMEXT 
USA 
Czech Rep. 
Switzerland 
Japan 
Israel 
Australia 
Canada 
China 
Total Extra EU CN 6911.10 
Tonnes 
10136.6 
6255.9 
3607.4 
3725.8 
2671.2 
1630.6 
1569.0 
11.0 
43137.2 % total exports 
23.5 
14.5 
8.4 
8.6 
6.2 
3.8 
3.6 
0.02 
100.0 CN 6912.00 
Tonnes 
63334.1 
790.6 
3161.7 
3733.6 
4326.0 
6114.8 
3752.9 
34.7 
107203.7 % total exports 
59.1 
0.7 
2.9 
3.5 
4.0 
5.7 
3.5 
0.03 
100.0 
So while imports from China are growing and constitute the most important source 
imports into the EU of porcelain and chinaware and earthenware, EU exports to China 
remain virtually nil. The Chinese can not import, principally because they have plenty of 
capacity themselves, but also because they do not have the financial means. 
They can, however, export, since, it is alleged, their exports are priced not in accordance 
with production costs, but in accordance with foreign currency needs. Chinese exporters 
continue to sell tableware on European markets at very low prices, and this is damaging 
to European markets. 
The three biggest tableware producing countries of the EU are France, Germany, and the 
United Kingdom where producers consider great harm has been done to the main 
producing areas by cheap Chinese imports over the years. Developments in French, 
German, and UK consumption of tableware over the last three years are shown below. 
(NB movements in domestic sales figures have been checked: whilst 1996 was a very 
disappointing year on the German market, demand in the UK was said to be at its highest 
since the end of the second world war.) 
CN 6911 Source: Imports - COMEXT; Domestic sales - Cérame-Unie 
NB: Imports are extra-EU imports + imports from other Member States. 
FRANCE WO ECU 
Domestic sales 
Imports 
Of which, China 
China as % total imports 
Apparent consumption 
China as % of apparent 
consumption 1994 
111555 
85442 
11473 
13.4 
196997 
5.8 1995 
102261 
82230 
6906 
8.4 
184491 
3.7 1996 
98276 
81285 
5030 
6.2 
179561 
2.8 
22 
GERMANY '000 ECU 
Domestic sales 
Imports 
Of which, China 
China as % total imports 
Apparent consumption 
China as % of apparent 
consumption 1994 
579813 
111979 
6358 
5.7 
691792 
0.9 1995* 
670744* 
394616* 
119284 
62938* 
7976 
15.9* 
6.7 
1065360* 
n/a 
5.9* 
n/a 1996* 
614355* 
400254* 
132371 
70839* 
8559 
17.7* 
6.5 
1014609* 
n/a 
7.0* 
n/a 
* 6911+6912 + 6913 
UNITED KINGDOM '000 ECU 
Domestic sales 
Imports 
Of which, China 
China as % total imports 
Apparent consumption 
China as % of apparent 
consumption 1994 
168197 
46387 
2943 
6.3 
214584 
1.4 1995 
174592 
44677 
3728 
8.3 
219269 
1.7 1996 
285441 
47326 
4590 
9.7 
332767 
1.4 
CN 6912 Source: Imports - COMEXT; Domestic sales - Cérame-Unie 
FRANCE W0 ECU 
Domestic sales 
Imports 
Of which, China 
China as % total imports 
Apparent consumption 
China as % of apparent 
consumption 1994 
21284 
94200 
4685 
5.0 
115484 
4.1 1995 
20912 
98082 
2750 
2.8 
118994 
2.3 1996 
19306 
85749 
2768 
3.2 
105055 
2.6 
GERMANY WO ECU 23 
Domestic sales 
Imports 
Of which, China 
China as % total imports 
Apparent consumption 
China as % of apparent 
consumption 
* 6911+6912 + 69 1994 
n/a 
92909 
16067 
17.3 , 
n/a 
n/a 
13 1995* 
670444* 
394616* 
96486 
62938* 
11967 
15.9* 
12.4 
1065360* 
n/a 
5.9* 
n/a 1996* 
614355* 
400254* 
101321 
70839* 
13968 
17.7* 
13.8 
1014609* 
n/a 
7.0* 
n/a 
UNITED KINGDOM W0 ECU 
Domestic sales 
Imports 
Of which, China 
China as % total imports 
Apparent consumption 
China as % of apparent 
consumption 1994 
n/a 
70750 
2705 
3.8 
n/a 
n/a 1995 
n/a 
67284 
4043 
6.0 
n/a 
n/a 1996 
402030 
80734 
7086 
8.8 
482764 
1.5 
It must be stressed that total imports as mentioned above means imports not only from 
third countries, but also includes imports from all other Member States, and that there 
is significant intra-EU trade in ceramic tableware. 
Apart from the good year enjoyed by the UK tableware sector in 1996, EU tableware 
producers are still generally feeling the effects of the recession in the sector and 
consumption levels are still depressed. They also feel that, despite the existence of the 
quota system, the threat posed by Chinese imports of low-priced ceramics is still harming 
their industry. 
As the import figures above are from COMEXT, they are reported figures. What is not 
known is if this is the true extent of the Chinese presence on European markets, since 
there is a suspicion that imports are also being routed through other countries, such as 
Hong Kong and, more recently, Vietnam. For instance, there is no local production of 
ceramic tableware in Hong Kong, yet in 1996, Hong Kong exported to the EU (EUR 15) 
the tonnages and values shown below: 
24 
Value 
Tonnes (million ECU) 
CN 6911.10 4893.3 5.8 
CN 6912.00 706.8 0.9 ECU/kg 
1.19 
1.26 
Source: COMEXT 
2. Prices 
Average prices of Chinese imports have usually been well below European prices both 
for porcelain and chinaware and for earthenware. Below is a comparison of average 
prices charged for imported Chinese goods, with the average price of similar products 
manufactured in the EU. 
ECU/kg Source: Cérame-Unie members 
CN6911 
CN6912 Chinese 
European 
Chinese 
European 1992 
1.06 
5.55 
1.04 
2.38 1993 
1.11 
4.15 
1.08 
2.21 1994 
1.04 
5.34 
1.19 
2.34 1995 
1.10 
3.39 
1.10 
2.06 1996 
1.57* 
5.99* 
n/a 
n/a 
* Germany only. N/afor rest of EU. 
For the two specific products subject to quota, Chinese prices compared with the average 
intra-EU levels in 1996 were: 
ECU/kg Source: COMEXT 
Chinese Intra-EU 
CN 6911.10 1.15 5.50 
CN 6912.00 L21 2.27 
As can be seen from the above figures, whilst the existence of quotas may have limited 
the quantity of Chinese imports, the prices of these have remained fairly stable. 
European prices have, however, come increasingly under pressure, not only because of 
the presence of low-priced imports notably from south east Asia and central and eastern 
Europe, but also because there is still a certain production over-capacity in the European 
Union. 
25 
3. Counterfeiting problem 
An additional problem which European tableware manufacturers face due to Chinese 
imports is that they are often counterfeit. That is, Chinese producers have been known to 
send representatives to Europe where they copy European designs, which are produced in 
China and sold in Europe at much lower prices than the European products. Examples 
have been shown in the past of Chinese products being sold in European markets, as 
virtually exact replicas of European products, including one of a product manufactured in 
Germany whose list price is 41 times the selling price of the product made in China. 
4. Opinion of the Community Industry 
The European ceramic tableware sector is represented at European level by the 
Fédération européenne des Industries de Porcelaine et de Faïence de Table et 
d'Ornementation (FEPF), which in turn is a member of the general European ceramics 
federation, Cérame-Unie. Cérame-Unie which represents some 75% of all tableware 
producers in the European Union remains firmly in favour of the continuation of the 
quotas. 
5. Opinion of Importers 
The Union of European Glass and Pottery Wholesalers Associations, on the other side, 
believe that the persistence of quantitative restrictions on Tableware would harm the 
European Industry, and that imports should therefore be fully liberalized. 
C. Conclusion 
In view of the above, the tableware sector remains sensitive because of the high volume 
of the Chinese imports, their considerable disruption potential and the substantial price 
undercutting. 
A. Situation of the Community toy industry 
Structure of the industry 
The structural features outlined in the two previous reports have changed 
considerably. Fresh data from reliable sources (Eurostat's Comext and Deba 
databases and the Industry) have been considered, contributing to define a clear 
picture of the sector. Overall, the EC toy industry appears to be significantly 
healthier and capable to compete in the foreign markets, as well as-much less 
vulnerable to low-priced imports as compared to previous years. 
2. Community production and export performance 
Community consumption in 1996 was almost stable (-0.32% on 19951), as well as 
the production (-0.49%1). Exports of European toys outsicle the Community have 
grown by a record 16.8%2 while imports have grown by 3% over the same year 
1996. 
The overall picture for products under Codes CN 9501 to 9505 (NACE 36.5 for 
production and consumption) is as follows: 
ECU'000 1995 1996 
Production (excl.VAT) 5,307,500 5,281,500 
Exports 1,153,021 1,346,989.24 
Imports 4,413,423.35 4,548,081.51 
of which imports from China 2,199,355.40 2,419,509.24-
Apparent consumption 8,221,800 8,195,300 
Market share of imports (est.)-3 53.7 /o 55.5 /o 
Market share of imports from 26.8% 29.5% 
China (est.) 
1 Source: Eurostat Deba database, considering NACE Rev. 1 Code 36.50, i.e. CN 9501 to 9504 
2 Source Eurostat Comext database, CN 9501 to 9505 
3 As the figures on apparent consumption do not include CN 9505, the market share of imports is probably 
lower. 
27 
These figures clearly indicate that the EC toy industry has recently been able to 
adapt to the new global conditions and is becoming increasingly competitive in 
foreign markets. The healthier situation that the industry is now enjoying, 
confirmed by last year's record export performance, is a result of the restructuring 
efforts accomplished succesfully thanks to the temporary relief ensured by the 
quotas. 
Employment 
Direct employment fell by 4.3% in 19964. However, this loss is compensated by a 
considerable growth in indirect employment, mainly distribution (import-export, 
wholesale and retail). According to the representatives of the industry, "the 
European Union has 2,000 companies working in the toys and games sectors. The 
toy industry employs over 100,000 people in the European Union, 55,000 of which 
working in indirect employment". 
Workforce 1995 1996 
Direct employment 51,553 49,321 
B. Sensitivity to Chinese imports 
1. Import trends 
Total toy imports from outside the EU (excluding China) fell by 3.9%; while 
imports from China rose 10 %. Non-quota toys from China, accounting for 74.4% 
of total Chinese imports into the EU, were up 8.3%, while those under quota were 
growing at almost twice this rate (15.2%). 
ECU '000 
Toys under quota 1994 
-9503 41 
- 9503 49 
- 9503 90 
Non-quota toys 
Total imports from 
China 
Total imports from other 
countries 1995 
537,750.03 
179,798.42 
46,391.40 
311,560.21 
1,661,605.37 
2,199,355.40 
2,214,067.95 1996 
619,641.39 
207,387.39 
65,609.46 
346,644.54 
1,799,867.85 
2,419,509.24 
2,128,572.27 1996/1995 
(%) 
+ 15.2 
+ 15.3 
+41.4 
+ 11.3 
+8.3 
+10.0 
-3.9 
4 Source: Eurostat Deba database, considering NACE Rev. 1 Code 36.50, i.e. CN 9501 to 9504 
28 
2. Import Prices 
The import prices of toys under quota from China have slightly increased 
(+5.60%) since 1993, as shown in the table below. At the same time, the 
difference between the import prices of the same products and the EU export prices 
has significantly decreased, due to an improved productivity of the EC industry 
Prices in ECU/tonne 
Toys under quota 
Differential with 
EU export price 1993 
5 537 
2 023 1994 
5 602 
1614 1995 
5 379 
1434 1996 
5 847 
1524 Evolution 93-96 
+ 5.60 % 
- 28.66 % 
Source : EUROSTAT 
3. Current restructuring moves 
The temporary protection ensured by the quota has helped the EC toy Industry to 
gradually adapt its production structure in order to meet the needs of a fast-
. changing market. The efforts undertaken during the last years appear to have born 
fruit in terms of restructuring production and improving the quality of the products. 
Most manufacturers in Europe are now also becoming importers for some items 
which may be necessary for them to keep their market share both in the EU and on 
export markets. 
C. Opinion of the Community industry 
Toys Manufacturers of Europe and Fédération Européenne des industries du Jouet 
recently merged and formed a new umbrella organisation, Toy Industries of Europe 
(TIE), which represents over 90% of the industry within the EU. 
While expressing satisfaction for the suppression, on the occasion of last year's 
review, of quotas on toy parts and components , TIE clearly expressed its strong 
support for an immediate and total abolition of all quotas on toys. According to TIE 
these quotas would represent an additional administrative burden, which affects 
particularly small businesses, while failing to restrict imports of Chinese toys into 
the EU. 
D. Conclusion 
The market share of Chinese toys in the EC remains high and is likely to increase. 
However, the situation of the EC industry has considerably improved since the 
quota was introduced in 1994. The quotas have allowed the EC industry to 
successfully implement, in a gradual way, the necessary restructuring efforts and to 
reorganise its production during the last years. Many imported products are no 
longer produced in the EC. At the same time, the EC industry is now increasingly 
exporting and competing succesfully in foreign markets, as shown by the above 
29 
figures. Given these recent changes that the toy sector has experienced and in light 
of the EC Toy industry's position, which appears to have become now sufficiently 
resistant, the Commission believes that the maintenance of a quantitative restriction 
does not appear to be necessary any longer. 
30 
III. Overall conclusions 
From the information it has gathered the Commission has drawn the following 
conclusions: 
1. In general terms the sectors covered by the quantitative restrictions have made 
efforts that have borne fruit in terms of restructuring production and improving 
the quality of the products under quota. However, while the European producers 
are continuing in this effort the Footwear and Tableware sectors remain 
particularly sensitive. 
- The overall situation is precarious: all these industries are affected in varying 
degrees by stagnating production, declining sales and exports, closures and job 
shedding. 
- Most are labour-intensive, fragmented industries that are particularly vulnerable 
to competition from low-cost countries and have already lost a large share of the 
Community market to them. 
- Most are engaged in restructuring exercises which look promising but are costly 
and difficult to carry out - a waive of low-priced imports during this particularly 
vulnerable situation would condemn them to failure. 
- Some, such as the toy industry, have recently relocated part of their production, 
are considering doing so, or have subcontracted work in low-cost countries in 
order to reduce costs and so compete with these low-cost countries. The toy 
industry has clearly shown to have benefited from the temporary relief ensured by 
the quotas and it appears now to be ready to compete on a sufficiently strong 
position in the global toy market. 
2. Chinese competition, in general, remains a real threat: 
- China has enormous - and growing - production and export capacity in the 
sectors covered by quantitative restrictions and its exporters would, in their 
absence, soon be in a position to unleash huge quantities on the Community 
market. 
- Imports from China had already seized sizeable market share, or were in the 
process of doing so, when quantitative restrictions at Community level were 
introduced. 
- The prices of imported Chinese products remain much below those of 
comparable Community products. They are also well below those of other 
Community suppliers. 
- Frequent occurrences of counterfeiting in the case of some products, namely 
porcelain and ceramics, further distort competition. 
- An additional consideration is the particular nature of the Chinese economy. 
China has been striving, over the last few years, to liberalize its trade regime and 
open its economy to the world. These measures represent important steps forward, 
31 
however, the Chinese authorities still exercise great influence on the operation of 
the Chinese industry: e.g. artificially low prices that do not reflect the real 
economic cost of the products concerned and export strategies that are governed 
by not strictly commercial considerations. On the import side, China maintains 
high tariffs on many consumer products, but the more prohibitive restrictions 
stem from non-tariff barriers such as quotas, licence requirements, restrictions on 
foreign currency and technical barriers. Products may be imported only by foreign 
trade corporations that are authorised, and essentially controlled, by the Central 
Government. 
3. There is thus reason to believe that the outright abolition of the remaining 
quantitative restrictions would lead to a renewed upsurge in imports from China 
and a further dangerous weakening of the market position of the Community 
industry concerned, with the exception of the toys sector for which such outcome 
is less likely. 
4. However, it should be noted that China is likely to achieve full WTO membership 
in the next few years. In the context of China's accession to the WTO, the EC 
quotas will be gradually phased out. The EC Industry will then be faced with a 
situation in which imports from China will be unrestricted. Consequently, the 
Commission considers it important to move towards a gradual liberalization of the 
quotas, which would avoid a sudden disruption of the EC market. A moderate 
increase in the level of the quotas, therefore, would be a step in view of allowing 
the industry to gradually adapt to compete in the global market. 
5. This does not mean that specific issues relating to imports from China will not be 
dealt with appropriately. Under WTO rules, particular import problems 
concerning prices or volumes can be tackled effectively by specific trade policy 
instruments. Chinese membership to the WTO is also likely to favour a solution 
to the problem of counterfeiting. 
In light of the above, the Commission believes that the reasons that led the Council to 
introduce the quantitative restrictions covered in this report are, excluding toys, overall, 
still valid. At the same time, a gradual and limited increase in the level of some of the 
remaining quotas, without disrupting the market, would also appear to be appropriate. 
32 
CHAPTER 3 
IMPLEMENTATION AND MAINTENANCE OF SURVEILLANCE MEASURES 
I. Purpose of surveillance measures 
The Council introduced these measures to keep imports of a variety of products 
under closer observation in cases where the trend gave cause for concern but was of 
no immediate danger to the Community industry. 
II. Implementation 
Prior Community surveillance is carried out through a system whereby licences are 
automatically issued free-of-charge for any quantity requested within five days of the 
lodging of a request by a Community importer. 
Regulation (EC) No 519/94, as amended by Regulation (EC) No 139/96, brought in a 
standard simplified Community surveillance document which reduced to a minimum 
the formalities to be accomplished by importers and Member States in connection 
with imports under surveillance. 
In April 1996, following the conclusions contained in the Commission's first report, 
the Council decided by its Regulation (EC) No 752/96: 
- to remove a range of products of which the imports in 1994 were negligible or 
lower than in 1993, from the list of products subject to Community surveillance; 
- to insert certain products in respect of which quotas were abolished (gloves and 
combined car radios) in the list of products subject to prior Community 
surveillance. 
In May 1997, following the conclusions contained in the Commission's second report, 
the Council decided by its Regulation (EC) No 847/97: 
- to remove a range of products of which the imports in 1995 were lower than in 
1994, from the list of products subject to Community surveillance; 
- to insert the products in respect of which quotas were abolished (toy parts and 
accessories and glassware as from 1 January 1998) in the list of products subject 
to prior Community surveillance. 
33 
III. Trends in imports of products under surveillance 
The table below gives import figures, in thousands of ecus, for products under 
surveillance in 1996, excluding certain hi-tech footwear, and sets them against the 
1995 figures. 
CN code 
2827 10 00 
2905 49 90 
2918 14 00 
2941 30 00 
2941 40 00 
3204 13 00 
3204 15 00 
3604 
3905 30 00 
4203 29 91 
4203 29 99 
6402 19 
6403 19 
6913 10 
8712 00 
9503 30 
9503 60 
9504 40 
9603 29 
9603 30 
9603 40 
9603 90 Description 
Ammonium chloride 
Other polyhydric alcohols 
Citric acid 
Tetracyclines and their 
derivatives 
Chloramphenicol 
Basic dyes.... 
Vat dyes ... 
Pyrotechnic articles 
Polyvinyl alcohols 
Gloves 
Gloves 
Footwear1 
Footwear1 
Ornamental articles of 
porcelain 
Bicycles 
Construction sets 
Puzzles 
Playing cards 
Brooms and brushes 
Brooms and brushes 
Brooms and brushes 
Brooms and brushes 1995 
1307 
3463 
21313 
48402 
7786 
7773 
9927 
67210 
19711 
5513 
4041 
5562722 
4196854 
75303 
2001 
50884 
6163 
2592 
20235 
7037 
17895 
15857 1996 
1112 
5801 
13179 
55431 
6479 
5121 
8888 
89280 
16721 
7581 
5582 
9411352 
5768424 
65326 
2404 
42353 
8545 
1989 
23408 
8989 
19037 
13620 Imports 
China/Extra-
EC (1996) 
81.00% 
17.28% 
40.56% 
64.41% 
85.70% 
21.29% 
14.98% 
77.31%o 
16.96% 
26.17% 
13.52% 
44.44% 
25.34% 
69.95% 
0.53% 
15.98% 
40.30% 
17.66% 
47.22% 
30.08% 
65.23% 
24.76% 
Source : EUROSTAT 
measured in pairs 
34 
In the case of certain hi-tech sports footwear, imports Eurostat figures do not 
distinguish between those under surveillance and those not, so the Commission can 
only refer to the surveillance documents issued in 1996: 
ex 6402 99 6 344 717 pairs 
ex 6403 91 et 99 17 561189 pairs 
ex 6404 11 15 975 984 pairs 
total 39 881 890 pairs 
IV. Should surveillance measures be maintained? 
The figures provided here show that the share of imports from China of most of 
these products is still very high. The Commission believes that prior surveillance 
should be maintained for these products. 
35 
CHAPTER 4 
CONCLUSIONS AND PROPOSALS OF THE COMMISSION 
In view of the above, the Commission believes that the system of quantitative restrictions 
and surveillance measures set up under Regulation (EC) No 519/94 should be maintained 
but with the following adjustments. 
1. Quantitative restrictions 
- Abolition of the quota on Toys (CN 9503 41, 9503 49 and 9503 90). 
- Increase of 5 % in the level of the Tableware quotas. 
The Commission believes that a balance should be kept between ensuring an 
adequate protection of the industries concerned and maintaining an acceptable flow 
of trade with China, taking into account all the interests at stake and in the context of 
the developing global market conditions. 
Consequently, a moderate increase of 5% in the level of the Tableware quotas would 
be appropriate and in conformity with the above objective, without being likely to 
disrupt the Community market conditions. 
The proposed increases give the following results: 
Products 
Porcelain 
Ceramic CN code 
6911 10 
6912 00 Quotas 1997 
45 800 tonnes 
34 650 tonnes Level of Quotas 
after 5% increase 
48 090 tonnes 
36 383 tonnes 
2. Surveillance measures 
The proposal is to to include the Toys for which the quota is no longer considered 
necessary (CN 9503 41, 9503 49 and 9503 90) among the products under 
surveillance. 



36 
ISSN 0254-1475 
COM(98) 128 final 
DOCUMENTS 
EN 02 11 10 
Catalogue number : CB-C0-98-131-EN-C 
ISBN 92-78-31743-8 
Office for Official Publications of the European Communities 
L-2985 Luxembourg