China Trade With EU

I’m not very happy with the ‘US Trade Figures‘ post I put up last Friday. I think it’s a glorious mess. The key to the problem is that I tried to deal with two – interrelated but disinct – topics at once: the euro and China trade. So today lets ignore the euro (which has once more resumed the downwards drift, even as I write) and take a bit of a closer look at where we are – in trade terms – with China. (Btw: the planet has finally returned to its orbit, and Brad Setser has an analysis of the US trade data here).

The big item in this weekend’s news is, of course, the agreement reached with Beijing on textiles. The EU textile industry will now have three years to adapt, but since textile manufacturers don’t appear to have taken too much advantage of the ten previous years, it is hard to know whether this will serve any useful purpose. Doubly so, since it is not yet clear how the calculations will be made, and I have the distinct impression that much of the recent surge in imports will now, in effect, be consolidated.

Be that as it may, what about the broader issue?
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China and Protectionism

The Chinese minister of trade Bo Xilai was in Paris yesterday. Most likely this is simply a happy coincidence, but the timing couldn’t have been better. The issue of Chinese textile imports has become one of the issues in the French referendum, and minister Bo was conveniently available to make all the right gestures:

“We want to soften the shockwave that there could be from the rise in Chinese textile exports,” Bo told a news conference after talks with French trade minister Francois Loos…”It is a temporary phenomenon and this phenomenon will weaken or disappear”.
Source: Reuters

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