While Chinese textile makers are hailing the European Union's decision to lift the quotas on textile trade starting next year, the EU Trade Commission's top official says Chinese textile products may be removed from Generalized System of Preferences, or GSP list.

Chinese insiders express worries about the effects this may have on the domestic textile industry. EU Trade Commissioner Pascal Lamy said that the European Commission is due to make a decision this week on the reform of its Generalized System of Preferences, which may lead to the exclusion of Chinese-made textiles, according to China Radio International.

A senior Chinese analyst from the London-based Financial Times, Zhang Lifen, says that though no formal decision has been made, the European Commission is believed to have ruled Chinese textiles out of the system, as they think Chinese textile products have now gained adequate competitiveness in the European market.

"If EU carries out its new GSP system, that will be a big blow to the Chinese textile industry for the following couple of years. The EU countries are the major importers of China's textiles. If they remove China from its GSP list, that will have a direct influence on our textile exports."

At present, the EU's average tariff on textiles is nine percent, but Chinese products have been enjoying a lower, preferential rate.

The analyst says the coming abolition of textile quotas is another factor behind the lifting of the GSP. With textile quotas being removed at the end of the year, EU's trade officials expect a surge in shipments from China.

Many European countries view Chinese products as a threat to the local textiles industry. Zhang Lifen says it is unavoidable that more and more Chinese exports will graduate from the GSP list.

"At present, Chinese textile products have more advantages on quantity rather than quality and brand. So domestic producers should focus efforts on increasing the competitiveness of their products and, in particular, high quality."

Meanwhile, US textile and clothing manufacturers have again petitioned the US government to protect them against a surge of Chinese imports next year when worldwide quotas are removed.

Deputy director of China Chamber of Commerce for Imports and Exports of Textiles, Cao Xinyu has this to say about the petitions. "We think such safeguard measures are unreasonable. What the US textile industry has done does not accord with the provisions of the World Trade Organization and the relevant commitments China had made. We hope free trade can be realised soon."

The petitions cover cotton and synthetic trousers, wool trousers, shirts and underwear.

Source: CRI News