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Jun 19, 2007
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France raises prospect of new Bra Wars

By
Reuters
Published
Jun 19, 2007

By Sebastien Leroy

TOURCOING, France (Reuters) - France raised the prospect of a repeat of Europe's "Bra Wars" of 2005 on Tuesday by saying it would push to extend quotas on Chinese textile imports that are due to expire at the end of this year.

"Europe must help us and must stop being naive about globalisation," Prime Minister Francois Fillon said on Tuesday.

"We will fight to push back the 2008 date for the lifting of quotas on Chinese textiles, like the United States," he told reporters during a visit to a textiles plant in northern France.

EU textiles manufacturers are worried that Europe could be particularly exposed to a surge in imports from January 1 next year because the United States and other countries have quotas with China which only expire at the end of 2008.

New French President Nicolas Sarkozy has previously warned the European Union must not be "a Trojan Horse" for the problems posed by globalisation for EU industry and workers.

Fillon's comments came a week after China and the European Commission said they would stick to a 2005 accord under which the quotas expire at the end of this year.

SURGE OF CLOTHES

In 2005, a surge of Chinese clothing and textiles prompted the European Commission to negotiate import quotas with China.

But the quotas quickly filled up, leaving goods impounded in ports and new limits had to be renegotiated, despite opposition from many EU countries, such as Sweden, which slammed the move as protectionist and pandering to struggling European companies.

Italy has also said it will push for an extension of the quotas.

But the French prime minister's comments, so soon after last week's EU-China meeting, signalled an intensification of the fight to extend the quotas, a trade lawyer in Brussels said.

"As far as I know the textile lobby was waiting for this kind of pronouncement from France whose position was unclear until now. France will be the leader of the alliance," the lawyer said, asking not to be named.

"I am afraid (EU Trade Commissioner) Peter Mandelson may need to withdraw his promise to China to have free trade in textiles in 2008."

A European Commission trade official said Brussels was sticking to its position that the quotas would end on December 31 as scheduled, but China would have to play its part in ensuring there was no sudden flood of imports into Europe.

"The EU and China have agreed that government and industry on both sides have a joint responsibility to ensure the smooth transition when Europe's quantitative import restrictions end at the beginning of 2008," the official said.

The two sides are due to discuss textiles trade in July.

China on Tuesday said it will remove or reduce tax rebates on nearly 3,000 export categories, including textiles, to help reduce its trade surplus which has raised concerns in the United States as well as Europe.

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