Dti spells out pitfalls of safeguard action against Chinese textiles

Negotiated solution preferable JOY ORLEK THE DEPARTMENT of Trade & Industry has warned against the imposition of safeguards against China based on the surge in imports from that country. Deputy minister Rob Davies told the National Bargaining Council for the Clothing Manufacturing industry recently that while article 16 of China’s WTO accession agreement allowed any WTO member to impose safeguards on the basis not of demonstrated damage caused to the economy but only of a demonstrated surge in imports from that country, he said that China had made it clear that the imposition of safeguards under this article would be regarded as an extremely hostile action. Moreover, if safeguards were to be imposed by any one WTO member under this article, other members would be entitled to impose similar measures on the grounds of protecting themselves against a possible diversion of exports from the original country to themselves. “Several developed and developing countries have threatened to take action against China under article 16, but have always in bilateral negotiations been dissuaded from such a course of action,” he said. “A senior Chinese official recently told me that resort to article 16 would be regarded by China as a ‘nuclear bomb’ in terms of bilateral relations," he said. "Clearly then setting such a precedent would have very serious consequences for our relations with the emerging economic and trading power,” he added. He said government’s preferred course of action would clearly be to seek a negotiated solution with the People’s Republic of China, which could include some form of export restraint.”