China to Cancel Export Tariffs
China today said it would cancel export tariffs on 78 textile products amid a growing row with the United States and the European Union over a surge in shipments since global quotas ended on Jan. 1.
The canceled tariffs include those that the government had announced would be increased June 1, the Ministry of Finance said on its website.
The move came a day after China lashed out at the EU for taking its dispute with Chinese textile imports to the World Trade Organization, forcing an immediate curb in shipments of T-shirts and flax yarn.
“The Chinese side thinks that the European side launched an investigation and made a decision ... based only on three months of data,” Commerce Ministry spokesman Chong Quan said in a statement posted on the ministry’s website. “It’s an inaccurate assessment and an incorrect decision.”
European and U.S. textile makers say their livelihoods have been threatened by a surge in Chinese exports since the quotas ended Jan. 1.
According to EU figures, imports of Chinese T-shirts rose 187% in the first four months of 2005 compared with the same period last year, while imports of Chinese flax yarn rose 56%.
The EU took the dispute to the WTO on Friday, giving China 15 days to react. It means the EU will restrict imports of flax yarn and T-shirts to no more than 7.5% above the amount entering its market between March 2004 and February 2005.
“It not only sent the wrong signal of trade protectionism to the European industry, it also harmed the rights that Chinese enterprises should enjoy in the globalization of textile trade,” Chong said.
Under the terms of China’s WTO membership, if another member state can establish that Chinese textiles are disrupting the market, it may request bilateral consultations at the WTO. The EU said it put the issue before the WTO after a “thorough and fruitful” telephone discussion between EU Trade Commissioner Peter Mandelson and Chinese Trade Minister Bo Xilai.
This month, China announced a sharp boost in export tariffs in an effort to avert a trade war with the U.S. and Europe.
The U.S. imposed import quotas in mid-May on Chinese-made cotton pants and other goods. The quotas limit annual growth of Chinese textile imports to 7.5% -- well below the 54% jump reported this year by the U.S. Commerce Department.
