EC regulates to clear blocked Chinese imports

European Commission adopts regulation to clear blocked Chinese textile imports

Today the European Commission has adopted by written procedure a regulation providing the legal grounds for Member States to begin issuing import licenses to Chinese exports currently blocked from entering the European Union. The regulation will be published in the Official Journal tomorrow, September 13 and will come into force on Wednesday September 14. At this time, Member states will have the legal grounds to issue import licences to the relevant products.

EU Trade Commissioner Peter Mandelson, who negotiated the conditions for the release of the products with the Chinese and Member States said: “I am pleased that the EU and China have been able to resolve this problem with the implementation of the Textiles Agreement in a way that preserves it without unfairly penalising retailers and importers.”

The Regulation will provide for the following:

• The import levels have been modified to provide sufficient amounts to enable the import of all the blocked quantities (estimated at 87 m pieces). Half of this amount will be unblocked through flexibilities agreed with China: transfer of agreed quantities from 2006 into 2005 in categories 6 (trousers) and 31 (brassieres) to clear totally the pending goods, as well as partially (up to 5 % of the 2006 level) for category 5 (pullovers); for the other categories and for the rest of the amounts needed for category 5, the amounts will be transferred from the 2005 quantities of category 2 (cotton fabrics).

• The other half of the quantities needed are being provided by a unilateral increase of the import levels on the European side through the provision of additional quantities.

• In order to avoid any possible further problems of blockages this year a number of measures have been taken:

- the additional quantities provided by the EU have been rounded up in order to have an extra security margin

- a reserve of 2073 tons in category 2, which China agreed to provide from the 2005 levels will provide a reserve which can be used by the Commission to transfer from category 2 into other categories amounts that may be necessary

- flexibility provisions allowing 5 % of advance use, 7 % of carry over from previous years, and 4 % of inter-category transfer among certain product categories, have been introduced.

- These flexibility provisions will be available also in 2006 and 2007, thus enabling a better management of the agreed levels.

• The deadline for importers to request the issue of import licences for goods shipped from China before 20 July has been extended until 20 September. This should allow parties to have the clearest possible picture of the number of license applications pending. After that date, no such requests will be considered.

• A facility for Outward Processing Traffic - whereby part-finished clothing is finished in China and re-imported to Europe - has been introduced and will be immediately available for use by industry, in accordance with the normal rules in force within the EU.

The Commission and the Chinese authorities are in close contact. A Joint Administrative Arrangement to ensure a smooth management of the MoU of between the Commission and China’s Ministry of Commerce is also being finalised.

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