Notice of termination of the safeguard investigation concerning imports of certain textile products originating in the People's Republic of China

(2005/C 170/03)

1.   INTRODUCTION

On 29 April 2005, by a Notice of Initiation published in the Official Journal of the European Union  (1), the Commission opened, on its own initiative, a safeguard investigation on imports into the Community of nine product categories originating in the People's Republic of China (‘PRC’), pursuant to Article 10a of Council Regulation (EEC) No 3030/93 (2).

On 27 May 2005, the Commission requested formal consultations to the PRC in accordance with paragraph 242 of the Working Party Report of the accession of the PRC to the WTO and Article 10a of Council Regulation (EEC) No 3030/93 in respect of product category 4 (T-shirts) and category 115 (flax yarn). The Commission had early indications that disorderly development of trade, owing to market disruption, occurred for these products.

2.   TERMINATION OF SAFEGUARD INVESTIGATION

Following the consultations held in accordance with paragraph 242 of the Working Party Report of the accession of the PRC to the WTO, on 10 June 2005, the Commission and the authorities of the PRC agreed a Memorandum of Understanding concerning the quantitative limits for imports originating in the PRC into the Community regarding ten product categories, six of which are subject to the current investigation: category 4 (T-shirts), category 5 (Pullovers), category 6 (trousers), category 7 (blouses), category 31 (Brassieres) and category 115 (Flax or ramie yarn). As a result of this Memorandum of Understanding, Council Regulation (EEC) No 3030/93 has been amended by Commission Regulation (EC) No 1084/2005 (3) and the ongoing safeguard investigation for the covered products has to be terminated.

In respect of the remaining three product categories under investigation, namely category 12 (Stockings and socks), category 15 (Women's overcoats) and category 117 (woven fabrics flax), which have not been included in the Memorandum of Understanding agreed with the PRC, the Commission considered that, despite the increase in imports originating in the PRC, the overall situation of the Community producers does not call for the introduction of measures pursuant to paragraph 242 of the Working Party Report of the Accession of the PRC to the WTO (4) and Article 10a of Council Regulation (EEC) No 3030/93 for the reasons outlined below.

Category 12 (stockings and socks)

While imports originating in the PRC of products falling under category 12 increased significantly in the first quarter of 2005 when compared to the same period in 2004, the growth rate of imports originating in the PRC is abating. The growth of 305 % in the first quarter of 2005 went down to 246 % in the period January-April 2005.

As far as the situation of the Community producers manufacturing these products is concerned, it appears that both production and employment have remained more or less stable in the first quarter of 2005 when compared to the same period in 2004, even if there are indications of a drop in orders.

Category 15 (women overcoats)

While imports originating in the PRC of products falling under category 15 increased significantly in the first quarter of 2005 when compared to the same period in 2004, the alert level, as defined in the indicative Guidelines on the application of Article 10a of Council Regulation (EEC) No 3030/93, was not reached at the end of the first four months of 2005. Furthermore, the growth rate of imports originating in the PRC is abating. The growth of 181 % in the first quarter of 2005 went down to 158 % in the period January-April 2005.

The increase in imports originating in the PRC, although large in percentage, was entirely absorbed by an increase in apparent consumption in the Community. In absolute terms, imports originating in the PRC increased by 9 million units in the first quarter of 2005 when compared to the same period in 2004 while the apparent Community consumption increased by over 10 million units in the same period.

As far as the situation of the Community producers manufacturing these products is concerned, it appears that, while production has dropped slightly in the first quarter of 2005 when compared to the same period in 2004, profit levels of the Community producers manufacturing these products have remained stable and positive and no exceptional drop in employment could be noticed.

Category 117 (woven fabrics flax)

While imports originating in the PRC of products falling under category 117 increased significantly in the first quarter of 2005 when compared to the same period in 2004, this increase (ca. 2 300 tonnes) has been largely made at the expense of exporters in other third countries. Indeed the overall growth of imports into the Community only amounted to ca. 700 tonnes.

While the Chinese average unit prices are lower than those of other main suppliers, they have remained stable in the first quarter of 2005 when compared to the same period in 2004.

As far as the situation of the Community producers manufacturing these products is concerned, it appears that, while production has dropped significantly in the first quarter of 2005 when compared to the same period in 2004 (a drop of around 4 000 tonnes), it is not apparent that this drop is solely due to the increase in imports originating in the PRC.

3.   CONCLUSION

For the reasons set out above the safeguard investigation concerning imports of certain textile products originating in the People's Republic of China initiated on 29 April 2005 is hereby terminated.

(1)  OJ C 104, 29.4.2005, p. 21.

(2)  OJ L 275, 8.11.1993, p. 3. Regulation as last amended by Commission Regulation (EC) No 930/2005 (OJ L 162, 23.6.2005, p. 1).

(3)  OJ L 177, 9.7.2005, p. 19.

(4)  Document WT/MIN(01)3 of 10 November 2001.