In early September the EU and China reached a deal that allowed 75 million China-made garments held up at EU ports to enter the trading bloc, but half of the excess must be offset against next year's quotas. Hardly a victory for free trade, and a disappointment for China, which had hoped WTO membership would ensure full access to European markets.
European textile producers believe they have paid the price for a botched quota deal made in June. That deal capped growth in 10 categories of goods at between 8% and 12.5% until 2008, but retailers simply increased orders before the quotas came into force causing a flood of Chinese-made garments that the EU customs would not release. The result was a logjam that set EU retailers and consumers against EU producers.
EU retailers and consumers may be appeased by the September deal in the short-term but another face-off with EU textiles producers is likely next year. EU trade commissioner Peter Mandelson, who signed the deal with China's Commerce Minister Bo Xilai, told the Wall Street Journal that EU quotas will have a short shelf life.
The US is making no such noises. Its negotiations with China broke down again in September, after failed negotiations in June and July, so the US imposed limits on Chinese-made bras and synthetic fiber imports to persuade China to compromise its position. Nonetheless, an official with the Chinese Ministry of Commerce said he expects any deal with the US to be "no worse" than its deal with the EU.
The signing of the September deal paved the way for more deals to be made at the subsequent EU-China summit in Beijing, where the US$1.72 billion sale of ten Airbus A330 airliners to China Southern Airlines was agreed.
China Minmetals seeks JV
After its failed US$5 billion bid for Canada's zinc behemoth Noranda, state-owned China Minmetals proposed a JV with Brazil's CVRD, the world's largest iron ore producer, in a bid to secure easy access to metals from overseas, the Financial Times reported. CVRD already has plans to build a US$1 billion steel plant in Brazil with China's Baosteel.
Canada, China sign trade deals
Chinese President Hu Jintao struck trade deals with Canadian Prime Minister Paul Martin to expand trade links, particularly the export of Canadian oil and raw materials to resource-hungry China. China is Canada's second-largest trading partner after the United States with trade between the two countries reaching US$30 billion last year.
Gas export tax rebate to be scrapped
China announced the suspension of its export tax rebate on gasoline between Sept. 1 to Dec. 31 in a bid to ward off domestic shortages by making it more expensive to ship petroleum products overseas. Petroleum product exports have been growing this year because ceilings on state-set pump prices have led to deepening domestic losses for China's refiners and have pushed them to seek overseas markets to take advantage surging global oil prices.
China Southern to buy 10 Boeings
China Southern Airlines agreed to buy 10 Boeing 787 aircraft for about US$1.2 billion, state media reported. The sale is part of a larger deal signed in January in which six Chinese airlines agreed to buy 60 Boeing jets worth US$7.2 billion.