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| Issue 19, 2005 (23 September) |
European Parliament pushes for fair trading standards in the textiles market
On 6 September 2005, the European Parliament adopted -- by a large majority -- a report titled "Textiles and Clothing after 2005" by Tokia Saïfi (EPP, France). The report crystallises the concerns shared among a large number of European parliamentarians that are directly related to the growing share of Chinese-made textile products in the EU market. The report urges for competition between the EU and the mainland using balanced weaponry, which, in the words of the report, "so far has certainly not been the case".
Importantly, the report harbours on labour and environmental standards, and calls on the Commission to, on the one hand, negotiate the enforcement of such standards among WTO members, and on the other hand prohibit third-country products that do not meet such standards. The report is also critical of the level of piracy and counterfeiting that it alleges is being practised, to the detriment of EU industry. The report does admit, however, that "massive reductions in the prices of particular product groups can indeed benefit European consumers", but that such a scenario confronts the indigenous clothing industry with an almost impossible task (of competing). The more hard-hitting elements of the report are set down below:
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The report firstly points out that since 1 January this year, EU industry has had to contend with "soaring imports, not least from China", and has seen unprecedented job losses. However, the central problem concerning EU-China trade is perceived in the report as stemming from the state-owned nature of Chinese textiles firms, their alleged subsidisation and a consequent distortion in trade.
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Yet another perceived obstacle to fair trading is that, in the report's words, a majority of the counterfeit goods "dumped on the European market" hail from China, with about half of them being textiles and clothing. Such counterfeiting is, in addition, seen to be killing off one of the last advantages which EU industry still has left, namely creativity and innovation. The Parliament calls, in this respect, for strict measures against those that are complicit in counterfeiting and piracy.
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The report calls on the Commission to encourage WTO members to -- in the context of the Doha round -- secure (i) fair and reciprocal market access conditions for textiles producers, and (ii) recognition of ethical, social and environmental clauses. The Commission is also exhorted to step up political and economic pressure on third countries to achieve "the implementation of social and ecological standards in those countries".
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In addition, the European Parliament is all for using trade defence instruments: it presses the Commission to simplify the procedures for making anti-dumping arrangements easier for SMEs to use, and to make use of other such instruments when unfair practices are detected.
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The European Parliament also calls on the Commission and Council to extend the coverage of the Shanghai Agreement of 10 June to cover more than the ten categories thus far covered when necessary. It goes even further, encouraging the use of safeguard action "in the event of an inappropriate application of the agreement".
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A core aspect of the report appears to be the safeguarding of labour rights and environmental conventions. The Commission is exhorted to combat, within the WTO institutional framework, all forms of slavery, child labour and exploitation, especially among women within the textile and clothing sector in third countries.
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With the greatest of relevance to traders, the European Parliament pushes the Commission to propose that any enterprise wishing to export to the EU must declare its respect for international social and environmental rights, and that any imports that infringe such rights, particularly if made by prisoners, children or forced labour by workers without trade union rights, will be prohibited.
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The report also advises on the importance of introducing mandatory origin- and producer-name-labelling for products in the textile and clothing sector, to enable consumers to become aware of the origin of products.
The European Parliament's report does not have legally binding effect, but may be far-reaching nonetheless. This institution has grown in influence and persuasiveness over recent years, and the Commission -- together with the EU's Member States -- are likely to view the report with great seriousness.
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