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China lashes out at US, EU moves in textile dispute

JEJU — China’s top trade official lashed out yesterday at new restrictions on Chinese textile exports imposed by the United States and European Union, as Washington’s top trade representative defended the move.

Commerce Minister Bo Xilai said Beijing expressed "strong dissatisfaction” with the new limits, saying they posed "serious threats to Chinese textile enterprises.”

"It’s a move of protectionism,” Bo said at a news conference following a meeting of trade chiefs from the Asia-Pacific Economic Cooperation forum in the South Korean resort island of Jeju. Earlier yesterday, Bo met US Trade Representative Robert Portman to discuss the dispute over a surge of Chinese textile exports that began after quotas were scrapped last year.

After the talks, Portman said the two sides had held "very helpful, constructive discussions on the various trade issues” during their 1 1/2-hour meeting. But in later comments, he maintained Washington’s position that the import controls were in line with World Trade Organisation rules to which China had agreed.

"US safeguard actions are consistent with the World Trade Organisation, our rights under the World Trade Organisation,” Portman said during a separate press conference.

Concerns over a new trade war rose earlier this week when China canceled plans to raise tariffs meant to slow export growth. Beijing said the move was in retaliation for new import controls imposed by Washington and the European Union, who have argued that the wave of Chinese textiles seriously disrupted their domestic industries.

Bo said China had simply been following terms agreed to when it entered the WTO in late 2001. "We haven’t been gaining what we deserve,” he said.

Still, he said China was "willing to address this issue in a rational manner” within the framework of the World Trade Organisation.

Beijing had announced last week that it would quintuple export tariffs on 74 types of textile goods on June 1, hoping to persuade its trading partners not to restrict textile imports.

But Beijing dropped the plans following a US move to impose quotas to restrain the growth of imports of low-priced Chinese textiles.

The European Union referred the textile dispute to the World Trade Organisation, which triggered similar controls.

On Thursday, World Trade Organisation Director-General Supachai Panitchpakdi said the dispute was still in an "initial phase” which required further negotiations among involved parties.

"We would have to let the process take its course at the moment,” Supachai told reporters.

Portman is to join U.S. Commerce Secretary Carlos Gutierrez later this week in China, where he will meet China’s Vice Premier Wu Yi to discuss further the textile dispute. Meanwhile, Bo declined to comment directly on China’s plans to revalue its currency. However, he said "China does not want to have a large incremental increase in foreign exchange.” Portman said the talks did not link the textile and currency issue.