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Notiziario Marketpress di
Venerdì 10 Giugno 2005
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PETER MANDELSON EU TRADE COMMISSIONER EU - CHINA TEXTILES: “MANAGE CHANGE AND ADJUSTMENT, NOT TRADE” SPEECH TO TEXTILE PRODUCERS PALAZZO DELLA REGIONE, FLORENCE, ITALY, 6 JUNE 2005 |
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In this speech , Eu Trade Commissioner Peter Mandelson sets out the rationale for his position on rising Chinese textile exports. He argues for a policy that braces Eu producers for change while allowing China to benefit from textile liberalisation. Rejecting a return to the quota system for textiles, Mandelson argues his policy is based on the need to “manage change and adjustment, rather than to manage trade” (p4). Mandelson stresses that he is “hopeful” that the Eu and China can negotiate “a solution that is mutually acceptable to both sides” while recalling that the Eu reserves the right under the Textiles Specific Safeguard Clause to take action to provide its industry with “breathing space”. -Commissioner Mandelson argues that there is a genuine fear of job losses from market opening in Europe and the Us and that these must be addressed through concerted attempts to match liberalisation with measures for “compensating, or at least cushioning those adversely affected by trade liberalisation”. This, Commissioner Mandelson argues, is the defining feature of a progressive trade policy. (p3) -Commissioner Mandelson notes that the Eu is the world’s second largest exporter of clothing and textiles and that in less than a decade the Chinese market for luxury goods will have risen to about 250 million people. He says Europe “must strike a balance between keeping other markets open and helping our own industries to adapt”. His preference for negotiation with the Chinese, Commissioner Mandelson insists, is driven by the understanding that Europe, unlike the Us, has a significant textile export interest to China (p4). - Looking forward, he notes that he has requested formal consultations with China on two categories of imports and that seven textile investigations are still ongoing, with another eleven products being watched closely. He argues for the need to produce a case in all instances that is “legally irreproachable”, noting as a cautionary example that although imports in men’s shirts from China have risen by 100% in 2005, overall imports to the Eu of men’s shirts have dropped by 8%. (p4). I want to share with you today the vision I have for a European trade policy that creates jobs for its workers, wealth for its citizens, and is defined through a process that unites the member states of the European Union with each other as well as with the other trading nations of the world. I am not deaf to the calls that have come from here, from the heart of Tuscany and from many other regions of Europe, for protection from imports from abroad and notably from China. I will elaborate on that in a moment. But first I want to explain to you why questions of market protection are so complex and difficult and why they affect other sectors and policy areas as well. Trade protection measures are virtually never assessed in isolation. They are the outcome of a sophisticated examination whose object is to protect and create employment, and to enhance the ability of our small and larger companies to grow and to compete in the longer term. Many of you gathered here today are from the fashion industry. So you know all about the importance of speed, of adapting to new circumstances or market conditions, and about the role of technology and innovation to stay on top of your game. But to be successful, you depend on market access and for that markets need to be opened. That’s why we need to make the case for open markets when the public mood is showing signs in favour of more protected markets. I intend to shoulder my responsibility for making this case in the coming months. The case must start from a basic recognition: that there is a genuine fear of trade-related job losses on this continent as there is across the Atlantic. This is not surprising as, typically, the benefits from open markets are spread out across the economy, while the costs tend to be concentrated on an identifiable – and inevitably vocal - minority. This has important consequences. First, it means that trade opening and the impact this has, must be accompanied by a renewed push for microeconomic reform in Europe. We need to equip ourselves for change in the face of the competitive pressures exerted by the emergence of new trading powers. Second, it means that a progressive approach implies compensating, or at least cushioning, those adversely affected by trade liberalisation. Such supportive measures should not be seen as undermining liberalisation. I have no doubt about the economic value of free trade. History is littered with graphic examples of economic depression and the destruction of jobs and wealth when markets have been closed rather than opened. In the field of trade more generally the landscape has been changing very rapidly – with accelerating speed - in recent years, and this brings me to the subject that is in our minds today, which is the openness of Europe to the outside world, and to China in particular. We are all aware of the irreversible process of interaction and interdependence of economies that has been called “globalisation”. We must define how Europeans, with our single and united trade policy, can best harness globalisation while protecting our interests. The decision to lift quotas on imports of textile and clothing products was taken back in 1993 at the end of the largest trade negotiation ever, the so-called Uruguay Round. Europe and the United States made important concessions. In return for liberalising this sector, developing countries agreed to introduce laws to protect intellectual property and to open their own markets to goods and services from the developed world. But the European Commission also negotiated a transition period of ten years to eliminate these quotas, to give our textile and clothing industries a sufficiently long time to adapt. In addition, over € 500 million was set aside in our structural funds to help the textile industry to adjust, notably in Portugal and Greece. Parallel to this, after the death of Mao in 1976, China abandoned its international isolation and “opened the door to the West”. This led to a request to become a member of the World Trade Organisation. Negotiations were engaged in 1987, and after 14 years led to agreement in 2001 on the terms of China’s membership. It is the cumulation of these two events, the Wto trade agreement of 1993 and the entry of China into the Wto in 2001, that is now shaking up your sectors, here in Italy and elsewhere, so profoundly. Before speaking about the specific measures that we are taking or examining in this context, I want to stress one thing: the European textiles and clothing sector is a success, with a strong future. The European Union is the world’s second largest exporter of textiles and clothing. And we should not forget the importance of China’s growth which will make this economy the third largest market for luxury products in the world, many of which will be supplied from Europe. There are reliable estimates to the effect that as many as 250 million Chinese people will be able to afford luxury products in just five to seven years time. That’s why, in our response to China’s export growth, and in our desire to help our own industries to adjust, we must bear in mind our highest need to do all we can to expand our long term access to China’s marketplace. One thing is for sure, we cannot go back to the quota system that was abolished last December. We have been given time to adapt and many of you have invested huge resources to prepare for the emergence of China and other competitors. China itself has invested heavily to profit from what they see as their legitimate prize for Wto Membership. So what do we do that enables us to manage change and adjustment, rather than to manage trade? I am using the tools at my disposal, including the special safeguard clause which was negotiated and agreed with China for this purpose, to give you the breathing space you need and to help smooth the transition. Since January there have been alarming increases of certain categories of textiles from China. Once these trends were confirmed by reliable import statistics the Commission opened investigations to examine their effects in detail. These category-by-category investigations, by a specially formed Task Force in my services Dg Trade, are ongoing. The early information available has revealed that sharp market disruption had occurred and injury suffered by Eu industry for two categories of products: T-shirts and flax yarn. I have taken urgent action and requested formal consultations with China. This procedural step creates the base for any further imports in these categories. I am still hopeful to find a solution that is mutually acceptable to deal with these categories, by agreed or by autonomous action. But it does not end there. I will be considering, once our full analysis is complete, next steps for the other seven categories which are currently being investigated. This is not a simple task and it is not just about counting increases in imports from China. We are legally obliged to look at the overall picture, because unless it is clear that total imports, as opposed to just Chinese imports are growing, with consequent domestic impact, it cannot be said that the European industry is suffering. For example in men’s shirts, there has been an increase in imports from China of over 100% in the first quarter of this year, but overall imports into the Eu have dropped by around 8%. The imports from China must then, as a next step, be shown to have replaced our own production. The European Commission must look at the impact on market share, sales, employment orders, profitability and so on. When all these elements together show that injury to the Community producers is taking place, then I am able to react swiftly. We are currently also watching closely a third group of eleven products which have been showing serious import increases. I intend to take the necessary action if, and when, it is justified to do so in any of these cases. Now some of you may say that the Us is doing more for its industry than the Eu. Let me assure you that this is only a matter of timing and here I am talking of days or weeks. I am trying to find a more durable, wide-ranging solution together with China. My preference for negotiating is driven not least by the fact that, in contrast to Us industry, in Europe we have a significant export interest. But don’t get me wrong. If I cannot solve this through negotiation, I intend to propose measures that will assist you, reaching a balance in the different views and interests expressed by all Eu member States. Quotas on footwear from China also disappeared on 31 December. I am fully aware of the difficulties which this has brought to the Italian footwear sector and I am following this issue closely as well. The surveillance system we have put in place is in operation, and I expect to be able to examine import statistics soon. These figures should allow us to discuss more specifically the best course of action. In conclusion, I am sure Minister Urso, who has just returned from Beijing, will agree with me that China is not our enemy. This, in my view, is an excellent investment in our close and growing relations! For my part I will match him in deepening relations with China by investing significant energy in opening that country’s markets for the benefit of our companies. Last, I want to re-iterate my commitment to ensuring that the Eu textile and leather industries will be in a position to meet the challenges and difficulties presented to them. Do not think for one moment that I am not aware of your concerns. I spend an enormous amount of my time on these issues. I will continue to do so until I am satisfied that the current problems are eased to the best of our ability.
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