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China to Put Quotas on Textile Exports

June 22, 2005|From Reuters

China said Tuesday that it planned to launch a quota system to check its booming exports of textiles, a mechanism to help implement a deal reached with the European Union this month that eased trade friction.

China canceled export quotas at the start of January as part of a global move to end textile quotas. But surges in textile and clothing exports upset the European Union and the United States, which sought to impose safeguards.

Under the new regulations, which go into effect July 20, export licenses issued by the Commerce Ministry will be determined based on a company's exports in the previous 12 months, according to the Commerce Ministry's website.

The Commerce Ministry later detailed arrangements for exports of 10 products to the European Union from 2005 to 2007, according to China Central Television. Quotas for cotton cloth would rise 80% from 2005 to 2007, compared with 2004, while those for tablecloths would rise 90%, China's national broadcaster said. Quotas for some other products would rise 100% to 200%.

The broadcaster gave the example of T-shirts, saying China exported 120 million T-shirts to the European Union last year but could export 490 million T-shirts to the area this year.

China exported 40 million pairs of cotton trousers in 2004 but could export 310 million pairs this year, the broadcaster said. The government was considering trade performance after the quota system was canceled Jan. 1 "so that the phenomenon of transferring or trading of licenses should not occur," the official New China News Agency reported.

China agreed this month to limit annual growth in exports of various categories of textiles to the European Union to 8% to 12.5%. The quota system may be a move to appease the U.S. China and the U.S. are due to hold talks on textiles, but a U.S. embassy spokeswoman declined to say when discussions would start.

The European Union has now moved on to investigating China's sales of cheap shoes.

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