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ETEXTILE SECTOR: THE EU TO LIFT
TEXTILES QUOTAS FROM 1 JANUARY 2005
Today the Council adopted a Commission proposal for a
Regulation that will eliminate from 1st January 2005 all
quantitative restrictions on the import of textile and
clothing products from WTO countries. This Regulation
implements one of the key commitments taken at the end of
the last WTO Trade Round (“Uruguay Round”) in 1994. “This
definitively seals the disappearance of textiles quotas that
have been in place for four decades and there is no going
back”, declared EU Trade Commissioner Peter Mandelson. “The
challenge now for the textiles industry world-wide is to
compete in the new environment. But policy makers also need
to ensure that the transition is as smooth as possible and
managed in a way that does not wipe out the textiles
industries of weak and vulnerable developing countries. They
too should be able to benefit from liberalisation in due
course”, he added.
The Council Regulation will abolish from
1 January 2005 all quotas on imports of textile and clothing
products from WTO countries. It will also establish a
transitional regime concerning the import in the first
quarter of 2005 of products subject to the import quota
regime in 2004. The Regulation also sets
up a statistical monitoring system for the imports to the EU
of a number of textile and clothing products. This will give
early intelligence on signs of serious market disruption and
will allow the EU to follow closely the development of trade
in the new environment. The Commission
will favour dialogue and consultation in averting and
remedying possible problems. In this spirit a Sino-EU
Textiles Trade dialogue was begun on 6 May 2004. The
Commission welcomes the announcement by China at the
EU-China Summit of 8 December of a number of measures
designed to ensure that the expansion of textile exports
from China happens progressively. We hope that these Chinese
policies enable other developing country exporters of
textiles and garments to share the benefits from the
expansion of trade. In order to ensure
predictability in dealing with possible future requests for
safeguard measures, the Commission will shortly adopt
guidelines for the transparent handling of such cases. They
will cover in particular the use of the textiles-specific
safeguard clause contained in the Protocol of Accession of
China to the WTO. Peter Mandelson said, “Such measures
should be operated only if strictly necessary after
monitoring the effects of quota removal, primarily on
vulnerable developing countries.”
Background
The WTO Agreement on Textile and Clothing (ATC), which
established a ten year period for the elimination of the
quotas, will expire on 31 December 2004. From 1st January
2005 trade in textile and clothing products will be subject
to the general GATT rules, which proscribe the imposition of
quantitative restrictions for imports. The EU already
eliminated 56 bilateral quotas in 2002 under the 3rd stage
of integration of the ATC. The new Council Regulation will:
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Eliminate all quotas applied to the
import of textile and clothing products from WTO
countries, as of 1 January 2005 . Currently the EU
applies 210 quotas for the import of textiles and
clothing products from 11 WTO countries or territories
(Argentina, China, Hong Kong, India, Indonesia,
Malaysia, Peru, Philippines, Taiwan, South Korea and
Thailand), which have been in force under bilateral
agreements concluded under the former GATT Multi-Fibre
Agreement in the 70s. In 2003, EU-25 imports world-wide
of products for which quotas will be eliminated
accounted for 41.7 billion € or 63% of total textile and
clothing imports, although only 20% of EU imports were
imported under quotas.
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To ensure the respect of the
bilateral textile agreements, goods shipped before 1st
January 2005 and subject to quotas in 2004 shall be
subject to the import regime prevailing in 2004, even if
they are presented for customs clearance after 1st
January 2005 . However, in order to avoid excessive
burdens on trade and customs, from 1st April 2005 all
such goods will be allowed to enter the EU freely.
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A monitoring system will be set up
from 1st January 2005 to follow imports of the most
sensitive textile and clothing products. This scheme
will involve: (a) a customs-based monitoring of imports
of liberalised goods from all origins; and (b) a
requirement for the issue of an import surveillance
document for the import of certain products from China ,
which will be discontinued in 2005 as soon as the
customs-based surveillance system is fully operational.
This information will be made publicly available at
least on a monthly basis.
Imports quotas will, however, be maintained vis-à-vis
some non-WTO countries, i.e. Belarus and North Korea ,
Serbia and Montenegro and Vietnam, although agreements
being finalised with Vietnam and Serbia should lead to
the elimination of quotas for them early in 2005.
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