Brussels, 07/09/2005 (Agence Europe) - On Wednesday, the 25 Member States of the EU gave their political agreement to the agreement concluded on Monday between the negotiators of the European Commission and China, on the revision of the Shanghai Memorandum of Understanding of 10 June, which aims to limit Chinese textile exports to the Community market, up to the end of 2007. Meeting in Coreper on Wednesday morning, the ambassadors of the Member States approved, by a "broad consensus", the Commission's draft regulation, which is now to be adopted by written procedure in the next five days, the Commission spokesperson Françoise Le Bail explained. The political agreement of the Twenty-Five should therefore pave the way for the release of the Chinese goods which have been held in European ports since the summer, as of the middle of next week. The final decision will be approved on Wednesday afternoon by members of the "textiles" management committee of Coreper.
With the quota crisis causing a clear division between the Member States for several weeks, with the producing countries (calling for firm guarantees that any increase in quotas for 2005 will be deducted from the volumes to be exported in 2006 and 2007) pitted against the countries with a tradition of support for free trade, (which have spoken out in favour of the interests of the exporters and retailers and are calling for the import limits on textiles to be raised for 2005), it has finally been possible to reach agreement. The Member States, particularly the textile producing countries, have obtained "guarantees on the future management of the quotas" from the Commission, and therefore on the exceptional nature of the situation, which should not happen again in the future, said Ms Le Bail. It is worth noting that the two parties, the Europeans and the Chinese, have agreed to share the responsibility for the release of the goods: half of the 80 million garments will be considered as belonging to the quota for 2005. After some prevarication, China agreed to deduct the other half from the quotas earmarked for 2006, or to swap it for the unused 2005 quotas for a different category, cotton fabrics. The Union will, furthermore, take responsibility for the quotas exceeded on products which had obtained import licences for Europe before 12 July, the implementation date of the Shanghai agreement. Lastly, a follow-up committee to the agreement, made up of representations from both parties, will be created.
Although the agreement has come in for criticism from the European textiles industry, particularly by the industrial federation Euratex (EUROPE 9021), which sees this as the overturning of the Memorandum of Understanding of 10 June, the distributors feel that there is a risk that the same chaos could happen again next year and that many products which are still in China could be missing from European shelves this autumn. "We are satisfied with this as a short-term solution, but the agreement has many grey areas and does not remove all future uncertainty", said Ferry den Hoed, the president of the Foreign Trade Association, la FTA (an umbrella organisation for major European distributors), adding: "what it boils down to is that it could be chaos again next year". Mr den Hoed pointed out that European distributors are already placing their orders for the spring/summer season 2006. As for 2005, the distributors also feel that there will be many missing products from the categories covered by the EU-China agreement of Shanghai, and that price increases were a possible consequence of this. "Everybody is worried about the products which are being held in Europe, but we still have large quantities blocked in warehouses in China, which is granting no more export licences. Distributors are sending their buyers round the world to find substitutes. The European Commission is largely responsible for this chaos", said the FTA.