Europe scolds China on trade and currency

The European Union told China on Tuesday to open up a “two-way street” for global commerce or face complaints at the World Trade Organization and barriers to booming exports of goods like clothes, shoes and electronic goods.

A critical indication of looming problems between the two sides was the large and growing trade gap, EU officials said. While Chinese exports to the European Union during 2005 were worth €158 billion, European exports to China were worth €52 billion, the European Union said in a newly issued paper on trade relations with China.

The EU also called on China to allow the value of its currency to rise to cool demand for Chinese goods in Europe, and to make European products more attractive to Chinese buyers.

The EU said that it would not hesitate to use so-called trade defense measures, which can include higher duties and other sanctions.

The EU also criticized high tariffs China has imposed on some European exports, including fur, ceramics, steel and vehicles, and complained about “unreasonable sanitary and health requirements” that hamper exports of farm products from Europe.

Costly and complex procedures laid down in Beijing were a particular problem for telecommunications companies and banks seeking to do business in China, the EU said.

The International Herald Tribune, October 25-th, 2006

UNIT III

№ 12

U.S. SAYS CHINESE TAX ISN’T ENOUGH

China’s imposition of tariffs on apparel exports two weeks ago does not address the concerns of the United States, which wants Beijing to remove barriers to U.S. fabric exports and end local and provincial subsidies for apparel factories, a senior American trade official said here on Monday.

The complex global system of quotas that has governed international trade in textiles and apparel for more than three decades expired on Dec.31.That has prompted fears in the United States that low-cost Chinese exports might flood American and European markets and bankrupt local companies.

The Bush administration and the U.S. apparel industry had been counting on the re-imposition of quotas on Chinese apparel exports under special “safeguard” provisions that China accepted as part of the price of its joining the WTO in 2001.

Beijing set export tariffs on apparel on Dec.27 as a fixed sum, typically 2 cents to 6 cents a garment, rather than a percentage of the price of the garment.

Most of the cost of clothing sold in stores in the United States lies in the design, transport, financing, insurance, store rent and so forth, while the shirts, pants and other garments by themselves often cost only $1 or $2 to produce.

The International Herald Tribune, January 11^th, 2005

№ 13

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