WRITTEN QUESTION E-1713/00

by Paul Rübig (PPE-DE) to the Commission

(29 May 2000)

Subject: Conditions for China's accession to the WTO in the textiles sector

The accession of China to the WTO will have fundamental consequences for the European textile industry. China is currently one of the biggest exporters of textiles with a big and rapidly growing market share in the EU. According to various reports, it is China's strategy to enlarge its textile production capacity in the next few years and make a massive investment to modernise this industry and to increase Chinese textiles exports to the EU by more than 200 % in the next few years. There are plans to employ 15 million people in the textile industry and 7,6 million in the Chinese clothing industry. The industry would then be employing 22,4 million people, ten times more than in the EU!

The import quotas of the EU vis-à-vis China are among those which are very intensively used some of them to 100 %. This means that the abolition of all quotas in 2005 will lead to a massive increase in Chinese imports.

The EU textile industry therefore has a vital interest in securing a fair and open access to the Chinese market. Trade in textiles must not be a one-way street from Asia to Europe.

To ensure this, the textile industry needs:

- reciprocity of market access: China has to lower its tariffs and bring them into line with the EU level by 2005. Furthermore, China has to remove all its non-tariff barriers, of which it has quite a number in the textile sector,

- China has to introduce effective legislation for the protection of textile designs. These are a major asset of the European textile industry.

Will the Commission defend these demands in the negotiations with China?

Answer given by Mr Lamy on behalf of the Commission

(29 June 2000)

The negotiations between the Community and China concerning the terms of China's accession to the World Trade Organisation (WTO) were initialled in Beijing on 19 May 2000. The results have already been presented to the Council and the Parliament.

As the Honourable Member states, China is the largest supplier (in value) of textiles and clothing to the Community. China's accession to the WTO will mean that China will benefit from the WTO Agreement on textiles and clothing, in particular in terms of increased growth factors for the existing quotas and the phase out for all textiles quotas with WTO members on 1 January 2005, subject to such terms as may be agreed in the WTO working party on China's accession for example concerning safeguard provisions in the sector. China's accession to the WTO will therefore bring increased competition on the European market both for European industry and, particularly at lower price ranges, as between the main supplier countries in the sector such as, for example, China and India.

The Community's main priority for the sector in the negotiations on China's WTO accession was improved market access. As a result China agreed on a number of matters that will improve access to the Chinese market for European exporters in the sector. China will greatly reduce tariffs. These will be reduced progressively over the period to 2005. China's tariff offer in the sector was reduced further in the final round of negotiations. While the rates are somewhat higher than those of the Community and a limited number of tariffs peaks remain, the offer represents an average rate on industrial textiles and clothing products of 11,5 % (down from 27,3 %). All quotas maintained by China on imports of raw materials will be removed. China has agreed to remove the state monopoly on sales of exports of silk thus allowing European industry direct access to supplies.

In addition to the above matters, which are subject to transitional periods, the sector will benefit from the application of general WTO rules and disciplines, including those relating to intellectual property, and from other concessions made to the Community, for example concerning distribution rights, which will also facilitate exports to China. Moreover, as a WTO member China could become an important ally of the Community in its attempts to improve access to markets of other countries which, despite their WTO membership, continue to apply prohibitive tariffs in this sector.

The Commission agrees with the Honourable Member that textiles should not be a one-way street. The concessions made by China to the Community will be included, together with concessions made to other WTO members, in China's protocol of accession to the WTO. The overall result should create a considerable improvement in market access opportunities for the European textiles and clothing industry in China.