Local view for "http://purl.org/linkedpolitics/eu/plenary/2005-09-29-Speech-4-008"
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"en.20050929.3.4-008"2
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".
Mr President, the European textile and clothing industry is, and will remain, an essential part of the EU's industrial and social fabric. The figures speak for themselves: around 2.5 million employees, about 4% of EU GNP. There has been a significant reduction in employment in the sector over the past years. That is unavoidable in an increasingly open world economy, but this fact is of no consolation to the worker who loses his or her job.
What has been agreed is the maximum we could have extracted from China in terms of an agreed limitation of their exports, against the background of their and our WTO obligations.
On 5 September the EU and China decided through agreed minutes to fine-tune the implementation of the memorandum of understanding. These agreed minutes aim to unblock as a matter of urgency goods shipped after 13 July, the day following the entry into force of the regulation implementing the 11 June memorandum of understanding, in excess of the agreed levels set out in the memorandum of understanding. These agreed minutes entered into force on 13 September enabling from that moment the issuance of the necessary import licences and the release into free circulation of the merchandise which had been blocked on entry to the EU because of the exhaustion of the quantitative limits.
Through the agreed minutes, and in the spirit of close cooperation set up with the Chinese since the June memorandum of understanding, both parties decided to share the burden of the agreed solution. Half of the blocked amounts were unblocked by advance transfers from the 2006 agreed limits, plus transfers between different categories for 2005. The other half was unblocked through a unilateral increase by the EU of the import for 2005.
The Lucas report, which we will be discussing later, expresses concerns about the way the memorandum of understanding has been implemented, causing disruption to retailers and importers. In the implementation of the memorandum of understanding, the Commission has acted diligently and transparently. We have to remember that, in this case, we are dealing with unprecedented volumes of trade in clothes, which are creating unforeseen circumstances.
The difficulties arising from the transitional phase of the implementation of the memorandum of understanding should not recur due to an improved monitoring and control system applicable from now on. Should implementation problems arise in the future, the Commission will take expeditiously the necessary measures to ensure full respect of the memorandum of understanding as complemented by the agreed minutes of 5 September. But we insist that from now on, importers need to make sure that they conduct their operations in compliance with current EU regulations and that they verify that the quantities are available from the agreed limits.
Looking to the future, European industry now has an additional two-and-a-half years of predictability ahead, at least with respect to the product categories covered by the memorandum of understanding. The challenge for European industry now is to use this time to the maximum extent possible, in order to adjust to the new competitive situation that began to emerge regularly ten years ago. The difficulty of the challenge that faces the industry should not be underestimated, especially in those sectors where China's advantages, arising out of cheap labour, make it exceedingly difficult to compete.
The Commission, aware of the difficulties that the sector is experiencing, will continue its work in several other trade policy areas to provide the best possible environment for the industry to thrive in the current competitive environment. Among our priorities will be: securing better and effective market access in third countries, notably through the Doha development agenda negotiations, but also through bilateral contacts; fighting fraud, counterfeiting and piracy; and acting on allegations on unfair trading practices where justified. These and other measures are being examined in the context of the high-level group on textiles and clothing. The Commission is determined to take the necessary steps to give new momentum to those measures, which are destined to help the industry overcome successfully this transitional period.
The role of the Commission and the European Union as such is to provide a predictable framework for the European producers and importers in the context of an open economy. However, this framework must be a compromise between widely differing objectives. On the one hand, we must and will ensure continued protection of our industry against unfair trade practices. Also, if there are genuinely unforeseeable and major surges in imports, the European Commission should be ready to provide temporary relief to the European textile and clothing industry without neglecting other interests at stake, such as those of importers, traders and distribution or of industry that is sourcing abroad.
On the other hand, we must respect our commitments to China and help it to become a responsible WTO member. China, provided it avoids unfair trade practices, is entitled to enjoy the benefits of its comparative advantages and its WTO accession, while managing its integration into the global economy in a way that avoids trade disruption. This is what we have called the 'smooth transition'.
As far as the textile and clothing sector is concerned, the scene for what is happening today was set a decade ago. It was agreed during the Uruguay Round that we would gradually abolish the remaining quantitative restrictions on imports in the textile and clothing sector by 1 January 2005, after a decade of transition. However, few anticipated the scale and speed of China's rise in this sector. There is a need to create a positive environment in international trade for textiles and clothing after the end of the textile and clothing agreement. The European textile and clothing sector has already proved that it can adjust to difficult situations and that it has the capacity to compete. One fact is often ignored: the EU remains the world's second largest exporter of textiles and clothing. This fact contradicts the view of those who see globalisation and the rise of China, and India in particular, as a swamping of European markets by low-cost producers.
The truth is that the EU can compete globally but it involves a process of restructuring and adjustment playing to our strengths, not to the strengths of other countries.
We should focus on innovative, high-tech, valued-added textiles in which we are strong. It also requires that other countries, not least the most competitive textiles and clothing exporting countries, should open their markets to competition too.
That is why the current negotiations in the Doha development round are so important and China has to fulfil the commitments it made when it joined the WTO. When China joined the World Trade Organization it accepted a formal commitment that allowed the importing countries to apply special textile-specific safeguard measures if imports from China were to increase very rapidly and cause prejudice to the industry of importing countries.
It did not apply unilateral measures. The EU and China reached a reasonable and balanced memorandum of understanding on 11 June 2005. This agreement was the result of months of patient and difficult negotiations aimed at dealing with this problem in a negotiated way with China, rather than through unilateral safeguard action which would inevitably have had unwelcome repercussions. Above all it enables the European Union and China to focus on a more positive overall trade agenda and to continue building a solid trade and economic partnership in the textile and clothing sector as well.
Let me recall that this memorandum of understanding gives a breathing space to the European industry, giving it extra time to adjust. It also provides a predictable and sure trading environment between the EU and China for the textile and clothing sector enabling businesses, including both the manufacturing industry and importers, to plan their investments with more time and to adjust. It affords temporary protection to the current position of many vulnerable and poorer countries in the EU market and avoids a wide-ranging trade dispute with the EU's second largest trading partner."@en1
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