Local view for "http://purl.org/linkedpolitics/eu/plenary/2007-12-13-Speech-4-021"
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"en.20071213.4.4-021"2
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"Mr President, as Members of this House know, back in 2005 the EU and China agreed a memorandum of understanding that included a two-and-a-half-year transition arrangement designed to give some extra breathing space to EU textile producers following the liberalisation of global trade in textiles and clothing.
This is not because of a lack of competitiveness by European producers. We have a surplus in goods trade with the rest of the world and, where we are allowed to compete freely, we are a match for anyone. This is not the case in China. Instead of a level playing field, it is seriously tilted against us. We face trade and investment restrictions, rampant counterfeiting and regulatory barriers in virtually every sector. China’s WTO obligations six years after it became a member are still too often unmet.
I see the textiles problems as emblematic of the broader problems we face in China. We are China’s largest client for clothing and textiles. We have respected China’s comparative advantage in labour and production costs. We are focusing on our own comparative advantages. We are moving up the value chain in what we produce. We expect the same sort of equal opportunity and fair treatment in China’s market that Chinese producers receive in ours.
At the recent summit, the Premier of China, Wen Jiabao, appeared to hear and understand our strong concern and offered to create a high-level strategic mechanism with the EU to focus on rebalancing our trade deficit with China.
I welcome this, with one obvious caveat: it is not one more dialogue or one more roadmap we need, it is action – on the ground, in the markets, in the courts, where it matters to European exporters. And action not just by the Ministry of Commerce but across the board by the regulating agencies and ministries which restrict market access and law enforcement in all parts of China’s economy. The openness of Europe’s own markets to China will not be politically sustainable if this action does not occur.
I talk of textiles and clothing products, but also all sectors where Europe has export interests. The practical delivery of real change by the new high-level trade deficit mechanism, which I and my trade counterpart are charged with designing and launching, will be the definitive test of China’s sincerity. I hope their sincerity matches our own in wishing to resolve the issues before us without resorting to avoidable confrontation.
The arrangement capped growth each year for 10 particularly sensitive textile and clothing products. These caps expire on 31 December 2007, although the memorandum itself remains valid until the end of 2008, and it commits industry and government on both sides to work for a stable transition to free trade in textiles.
It was always my intention to hold China to that responsibility. The Commission negotiated with China a double-checking surveillance system for 2008 that will cover eight textile-product categories with particular sensitivities.
What this means is that China will issue an export licence for all exports and, in parallel, the EU licensing offices in the Member States will issue an import licence. It is a familiar system, and manufacturers, importers and retailers have all welcomed it. Its value lies in allowing us to monitor textile import patterns and, because imports have to be licensed before they leave the dock in China, it allows us to see likely developments in advance.
I am the first to acknowledge the fact that the textile and clothing industry is going through a long period of structural change. This started long before the dismantling of quotas. Successful European companies are not taking the mass producers head on but are investing in technology and in quality. We remain – it is always worth saying it – the second biggest textile exporter in the world. We have more fashion and quality brands than the rest of the world put together. It is a sign of the European textile producers’ confidence and resilience that they have not called for quotas to be further extended. They have argued that their competitiveness depends more now on effective action on counterfeiting and market access in China.
It goes without saying that I intend to throw the entire weight of our trade policy behind these two problems. On market access, we will be seeking new access for textile goods in the Doha Round and in all our new FTAs. We have also set up a specific working group for textiles as part of the renewed market access strategy. Europe is well poised to exploit huge new markets for consumer goods in the emerging economies and we will not simply be sitting back and hoping that these trends go our way.
Counterfeiting is, if anything, an even greater problem. Protecting trademarks and design rights is absolutely central to the textile industry and I raise these issues with the Chinese in every single meeting I have with them.
We have done some useful collaborative work with the Chinese customs service and trade fair organisers, and the Chinese patent office. But, on balance, China remains a huge problem for intellectual property rights holders. The counterfeit markets are cleared out one day and the traders creep back in the next. As I have said in the past, we have not ruled out the prospect of using the WTO if the situation does not improve. Ms Toia mentioned the ‘Made in’ proposal to assist textiles: I made this proposal, I presented it to the Commission, it was agreed by the Commission but it has not been agreed, I am afraid, by the majority of Member States. In view of this, I cannot press the proposal further or do more than I have done.
Last month, at the EU-China summit in Beijing, I was very careful to pass on some frank messages, and they apply in the textile sector as much as anywhere. The EU-China trade relationship has been transformed in the last two decades. Both sides have benefited from it immensely but it has become badly imbalanced. While China dominates our import markets, our businesses are losing out in China because of counterfeiting and market-access barriers amounting to EUR 55 million a day in lost business opportunities. Our spiralling trade deficit reflects both these things."@en1
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