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EU could start 'dumping' investigations

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The European Union is likely to initiate 'dumping' investigations against certain Chinese textile and garment products, a senior industry figure has warned.

Cao Xinyu, vice-chairman of the China Chamber of Commerce for the Import and Export of Textiles, said there could be claims that Chinese exporters are selling certain goods in Europe at below the cost of producing them.

"Several industrial associations from European countries, in particular South European countries, have been preparing dumping claims with the European Commission against eight categories of Chinese textile products," he said.

The targeted products include men's shirts, cotton towels, socks and underwear.

China reached an agreement with the European Union last June, freeing Chinese textile exports to the economic bloc from safeguard measures, but the agreement does not rule out the possibility of dumping claims.

Cao said his chamber has put exports of certain categories under close inspection.

The chamber has notified domestic exporters of the possibility of dumping charges. It will provide them with further information and legal help.

It is not clear whether the European Commission will launch official investigations and, if so, when it will do that because there are also people within the European Union that support Chinese imports.

China's export of textile products rose by 20 per cent year-on-year in the first quarter this year, but reports suggest some international buyers, such as Wal-Mart, have switched to buying from other Asian countries.

Cao argued that the industry's growth rate in the first three month was stable and "better than expected."

But he said it was of little value to compare this year's exports with last year because special circumstances skewed 2005's figures.

"Last spring nearly all textile producers exported products not only for the spring and summer, but also for the autumn and winter because of fears the European Union and the United States might suddenly shut the door to Chinese textiles."

In another development, the European Commission launched on Monday a public consultation exercise aimed at helping its forthcoming strategic review of trade and economic relations between the European Union and China.

"The commission will invite all interested parties to comment on how the European Union should manage its relationship with China in the decade to come," the commission said in a statement on its website.

Announcing the review last week in a speech, EU Trade Commissioner Peter Mandelson called China "the biggest single challenge of globalization in the trade field."

He said: "Europe must get China right, as a threat, an opportunity and as a prospective global partner."

Mandelson said the review would focus on "key challenges, such as intellectual property, market access issues and investment opportunities" and would "spark a lively debate both within the European Union and in China."

The Commission's Communication on the European Union's trade and economic relationship with China will be published in the last quarter of this year.


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