China Drops Tariffs Meant To Limit Textile Exports

BEIJING – China scrapped concessions yesterday meant to avert a trade war with America and Europe, withdrawing a plan to sharply increase export duties on Chinese-made textiles that are flooding foreign markets.The turnaround followed new import controls imposed by Washington and the European Union, which China’s commerce minister yesterday called a violation of World Trade Organization rules.He said Beijing would “firmly protect” its legal rights, though he didn’t say what steps his government would take.The announcement of plans to scrap the tariffs – which came ahead of a visit this week by U.S. Commerce Secretary Carlos Gutierrez – cited the American and European steps to restrict imports of Chinese clothing and textiles.Chinese producers shouldn’t face “double pressure,” Commerce Minister Bo Xilai said at a news conference.The European Union said yesterday it was “surprised” by China’s decision to cancel its export taxes but appealed to Beijing to continue talks.Beijing had announced last week that it would quintuple export tariffs on 74 types of goods on June 1, trying to persuade its trading partners not to restrict textile imports that have soared since a global quota system expired on January 1.In revoking the increases, the Chinese government cited American and European steps to restrict imports of Chinese clothing and textiles – measures that Beijing has criticized as unfair.“We cannot tolerate that China’s textile exporters are put under the double pressure” of quotas and export tariffs, said Mr. Bo. “Whenever they add 1 kilogram of pressure on Chinese companies, we will reduce the pressure by 1.2 kilograms.”The official Xinhua News Agency said the decision was made “in the wake of the European Union’s decision to impose quotas on imports of Chinese textiles, as well as the United States’ decision to re-impose restrictions on seven kinds of Chinese textile and clothing imports recently.”America and the European Union cited terms of China’s WTO membership agreement that let its trading partners restrict imports that are disrupting their markets.But Mr. Bo accused Washington and the E.U. of violating WTO rules by failing to provide adequate evidence of market disruption. He said they used data from too short a period and made an “easy decision” to impose quotas.“In our opinion, this move lacks legal grounding and therefore is incorrect,” Mr. Bo said. “The United States and European Union have not provided adequate data. …That is unreasonable and unscientific.”America says imports of Chinese clothing and other textile goods are 54% above last year’s level. The EU says imports of Chinese-made T-shirts rose by 187% in the first four months of this year, while flax yarn imports rose by 56%.The E.U. took the dispute to the WTO on Friday, giving China 15 days to react. It means the E.U. will be allowed to restrict the growth of imports of flax yarn and T-shirts to an annual rate of 7.5%.Washington earlier imposed controls restricting growth of imports of Chinese-made cotton pants, underwear, synthetic fiber shirts and other goods to an annual rate of 7.5%.On Friday, the Chinese government reacted to American import quotas by saying the new export tariffs wouldn’t apply to goods already affected by foreign controls.Mr. Bo complained that the foreign quotas were damaging a Chinese industry that employs 19 million workers, many of them poor.Mr. Bo said America and the European Union were partly to blame for the jump in Chinese textile imports because they failed to carry out earlier promises to lower market barriers, leading to a shock when the global quota system expired on January 1.“The fundamental, true reason for this is that the United States and the European Union could not faithfully and honestly implement their obligations,” he said.

China Drops Tariffs Meant To Limit Textile Exports

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