[Press Trust of India ]

Press Trust of India via NewsEdge Corporation :

Washington, June 17 (PTI) Nations with big textile industries are pushing to stall a European Union plan that would give trade discounts to textile makers from India, EU officials and diplomats said.

Under the programme, Indian textiles exporters would see their customs duties in Europe cut by a fifth. EU Trade Commissioner Peter Mandelson had tried to start it April 1 and is now trying to get it in motion by July 1.

Italy , France , Spain and Portugal are leading the opposition to the plan, officials in Brussels were quoted as saying by the Wall Street Journal.

With China agreeing to slow some textile exports to Europe, European textile makers are targeting India 's exports as the next biggest threat, the paper said.

Francesco Marchi, trade and legal affairs director at Euratex, Europe's largest textile industry association, said India represents almost as big a danger to the European industry as China .

India is Europe's third largest textiles supplier after China and Turkey . European imports of Indian textiles and clothing rose an average of 10 per cent in the first quarter, following the worldwide lifting of quotas on textile trade. In the previous five years, such imports were virtually flat.

India says its textiles are made in a fragile cottage industry that employs 85 million people, most of them women, and such small businesses need European help. "We don't understand why India is seen as a threat," said an Indian diplomat in Brussels .

Mandelson argues that he has already given European textile makers some protection in the deal with China . In China , state media recently reported Beijing will limit the growth of exports of 10 categories of textiles to Europe between 8 per cent and 12.5 per cent a year.

In Europe, the question is whether India should qualify for the trade discounts the EU wants to give out.

The trade commissioner wants to give discounts to India until its share of textiles imported reaches 12.5 per cent. Italy and France want the threshold to drive countries out of the programme to be 10 per cent, which would exclude India , which already has 11 per cent.

Indian textile exports, says the Journal, have sparked less alarm in Washington , in part because Indian exports to the US are not climbing as quickly and because the mechanisms for dealing with India are not as clear as with China , where Beijing agreed to potential protective measures when it joined the World Trade Organization.

The debate, says the Journal, underlines the continuing tensions over how to respond to Asia 's growing competitiveness. Manufacturers, particularly in Southern Europe , want protection. Northern Europe-based retailers and consumers are demanding access to less expensive products.

(THROUGH ASIA PULSE)

17-06 2005

Press Trust of India -- 06/20/05