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EURO NEWS UPDATE NO.41
Barroso opens 'no-taboos' debate on EU spending priorities
Commission President José Manuel Barroso made it clear, at the start of a public consultation on the review of the EU's €126.5 billion/year budget, that he regards the exercise as a unique opportunity to put all of the Union's political priorities up for discussion.
For further information please visit: http://www.euractiv.com/en/future-eu/barroso-opens-taboos-debate-eu-spending-priorities/article-166679
Currency trends in low-cost countries. Percentage change and Index comparison
The Currency Factor: Low-Cost Winners and Losers Currency Report
17 September 2007
The recent fall in the US dollar may not depress US apparel imports from a series of low-cost countries, as many other currencies are following the same trend. Compared with Vietnam, Indonesia and Sri Lanka, China is losing some competitive advantage as the yuan rises. By contrast, exports from Turkey, Brazil and India are being weakened by stronger increases in their currencies.
The US dollar is currently falling to new lows against the euro, as the US trade deficit and lower interest rates are depressing the American currency.
This new decrease in the US dollar versus the euro should not radically affect the level in U.S. apparel imports in the short term, as currencies of low-cost countries are following the same trend.
More than a fall in the US dollar, the current financial crisis is dominated by a rise in the euro, now reaching US$1.39.
The European currency was up 3.90% against the dollar in the year-to-date, gaining more than 2% in the first six months and another 1.29% from the end of June.
Boosting European imports?
Consequences may be decisive for the level in EU clothing imports in the next year.
Compared with Chinese yuan for example, euro's value rose 1.69% since 30 June after losing only 0.50% in the first half.
As a result, the Chinese currency is declining 1.17% in the year-to-date vs. the euro, limiting the rise in Chinese prices.
With elimination of European quotas now confirmed by Brussels, a surge in imports from China may be expected, in theory.
On the other hand, the value of the Chinese currency rose since the start of the year, compared with a series of other low-cost countries.
For example, the Pakistani rupee lost 3.23% in the year-to-date vs. the yuan, stimulating sales of domestic textile products to the Chinese market but also helping exporters to the United States or Europe to more easily compete with Chinese products.
Bangladeshi taka was down 4.65% against the renminbi while Vietnam's dong even lost 7.35% and Indonesia's rupiah declined 7.64%.
The winner is the Sri Lankan rupee with a 8.53% fall against the yuan.
India, Turkey and Brazil
More developed economies do not share the same advantage, losing more ground against China, on the contrary.
Indian rupee rose against currencies of nearly all other competitors, including China.
China's yuan is down 4.72% against the rupee in the year-to-date but the situation no more deteriorated since the end of the first half.
Turkey and Brazil are experiencing even stronger increases in their currencies.
The real was up 12.65% against the U.S. dollar since the start of the year while the lira was gaining 12.60%.
Thailand's exporters are also subject to a similar increase in their currencies.
As a result, Brazil and Turkey are also rapidly becoming major textile markets for exporters from low-cost countries.
Europeans rebuff US-style capitalism and fear Asian competition
Citizens from the EU's biggest countries are pessimistic about the bloc's chances of standing up to economic competition from Asia and they overwhelmingly reject US-style capitalism, a new poll has shown.
New EU states face labour shortages
Member states in central and eastern Europe are facing serious labour shortages while thousands of their workers are employed in richer western countries.
Finding a way through the data management minefield
Striking a balance between the protection of consumer data, legal, financial and reputation risk and the commercial value of consumer data for marketing purposes is key. Gary Pugh provides valuable tips on managing your customer data.
Ambitious European maritime policy on the cards
London - Asian and other global liner shipping industry organisations should have a clearer idea of where future European Union (EU) legislation governing maritime and port activities is heading by the end of October.
On October 10, the European Commission (EC) is due to present what the European Parliament (EP) describes as "an ambitious maritime policy package" focussing on "Europe's maritime reality and the importance of an integrated approach to maritime affairs". Environmental issues, notably vessel emissions, are expected to feature prominently.
In a separate development, also scheduled for October, the EC vice-president in charge of transport, Jacques Barrot, is due to put forward a text to the commission outlining proposals for a European ports policy - the third time the EC has tried to push through such legislation. Barrot has already stated that responding to the needs of containerisation and integrated supply chains will be a key issue in that context.
The EC's initial ideas for an EU maritime policy were outlined in a green paper published last year. At that time, the EC said the core objective of such a policy should be to "promote a maritime industry that is innovative, competitive and environmentally-friendly".
While much of the green paper in fact focused on environmental issues, it also stated that new methods of overall maritime governance were needed. Specifically, it argued, the current pattern of governance by sector or geographical area would have to be changed to embrace more uniform management of such operations across the EU.
"This will have consequences for maritime governance, whether at national, European or international level," stated the EC. For example, suggested the green paper, EU member states might look at deepening integration in the fields of Customs or safety of goods.
In July this year, the EP formally adopted a report detailing the issues its members felt should be included in the final maritime policy legislation. Predictably, the MEPs (Members of the European Parliament) cited climate change as the greatest challenge for such a policy and suggested key areas of focus should include moves to drastically reduce vessel emissions of substances such as CO2, SO2 and NOx (nitrogen oxide).
In that context, the MEPs asked the EC to come up with proposals to establish NOx emission standards for ships using EU ports, to consider introducing taxes or charges on SO2 and NOx emissions from vessels, and to encourage the introduction of differentiated port charges favouring ships with low emissions.
The EC is also set to have another go at establishing an EU ports policy. Two previous attempts to introduce such legislation failed, in 2003 and early 2006 respectively, after being rejected by MEPs. The key stumbling block in those instances was a proposal in the draft legislation that EU port handling operations should be opened up to greater competition, an idea which was fiercely proposed by European dock workers who feared job losses.
Quite how the EC will attempt to resolve that issue this time round is not yet clear. However, in a recent conference presentation, Barrot hinted the new legislation might include establishing minimum requirements for training for port workers. That suggestion has been already interpreted as an attempt to reduce trade union fears that moves to open up handling operations to greater competition might lead to existing EU dockers being replaced with cheaper, less trained, labour.
On October 10, the European Commission (EC) is due to present what the European Parliament (EP) describes as "an ambitious maritime policy package" focussing on "Europe's maritime reality and the importance of an integrated approach to maritime affairs". Environmental issues, notably vessel emissions, are expected to feature prominently.
In a separate development, also scheduled for October, the EC vice-president in charge of transport, Jacques Barrot, is due to put forward a text to the commission outlining proposals for a European ports policy - the third time the EC has tried to push through such legislation. Barrot has already stated that responding to the needs of containerisation and integrated supply chains will be a key issue in that context.
The EC's initial ideas for an EU maritime policy were outlined in a green paper published last year. At that time, the EC said the core objective of such a policy should be to "promote a maritime industry that is innovative, competitive and environmentally-friendly".
While much of the green paper in fact focused on environmental issues, it also stated that new methods of overall maritime governance were needed. Specifically, it argued, the current pattern of governance by sector or geographical area would have to be changed to embrace more uniform management of such operations across the EU.
"This will have consequences for maritime governance, whether at national, European or international level," stated the EC. For example, suggested the green paper, EU member states might look at deepening integration in the fields of Customs or safety of goods.
In July this year, the EP formally adopted a report detailing the issues its members felt should be included in the final maritime policy legislation. Predictably, the MEPs (Members of the European Parliament) cited climate change as the greatest challenge for such a policy and suggested key areas of focus should include moves to drastically reduce vessel emissions of substances such as CO2, SO2 and NOx (nitrogen oxide).
In that context, the MEPs asked the EC to come up with proposals to establish NOx emission standards for ships using EU ports, to consider introducing taxes or charges on SO2 and NOx emissions from vessels, and to encourage the introduction of differentiated port charges favouring ships with low emissions.
The EC is also set to have another go at establishing an EU ports policy. Two previous attempts to introduce such legislation failed, in 2003 and early 2006 respectively, after being rejected by MEPs. The key stumbling block in those instances was a proposal in the draft legislation that EU port handling operations should be opened up to greater competition, an idea which was fiercely proposed by European dock workers who feared job losses.
Quite how the EC will attempt to resolve that issue this time round is not yet clear. However, in a recent conference presentation, Barrot hinted the new legislation might include establishing minimum requirements for training for port workers. That suggestion has been already interpreted as an attempt to reduce trade union fears that moves to open up handling operations to greater competition might lead to existing EU dockers being replaced with cheaper, less trained, labour.
European Parliament demands toys meet EU standards
The European Parliament called in Strasbourg Wednesday in a resolution on the European Commission and member states to take necessary legislative and administrative action to ensure that consumer goods marketed within the bloc meet EU standards. The resolution on the safety of products, particularly toys, was passed with 660 votes in favor, 18 against and 7 abstentions at its plenary meeting. It urged the European Commission, the executive body of the EU,to improve the enforcement measures of the toys directive, including effective sanctions for non-compliance and to present the planned revision of the Toys directive by the end of this year,making sure efficient and effective requirements for product safety be included.
The parliament said that 24 percent of all detected unsafe products are children's toys in 2006.
Parliament member David Martin from Britain proposed "courses of action."
"Firstly, we have to push manufacturers to take a greater interest in their supply chain and, if necessary, apply penalties to those who do not take that interest. Secondly, we need the Commission to bring together the Member States to ensure tougher inspections in Europe, to ensure adequate customs control and to ensure the application of the existing European Union laws," he said.
Parliament members also called on the Commission to ensure that the CE marking is a guarantee of compliance with EU technical legislation, stressing that the CE marking, given its self-regulatory character, was never intended to be an EU-wide safety mark. It urged the Commission to assess the added value of creating a common European Consumer Safety Label, complementary to the CE marking, for all economic operators to help consumers to make an informed choice between products. The misuse of other voluntary marks should be made subject to penalties as well, it added. The document called on the Commission to clarify the procedure on import bans on a case-by-case basis when safety standards are regularly not met and use its powers to ban consumer goods from the EU market if they are found unsafe. As for EU member states, the resolution asked them to ensure strict enforcement of product laws, to step up efforts to improve market surveillance and especially national inspections and to make available sufficient resources to be able to undertake comprehensive and effective controls.
Brussels to face lawsuit over green bulbs
Just as EU ministers are due to rubber stamp the extension of tariffs on Chinese exports of energy-efficient bulbs at their meeting in Luxembourg on Monday (15 October), a major Italian lighting firm is planning to challenge the decision at the European courts.
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RoHS revamp may add pitfalls
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The European Union is reviewing its Restriction of Hazardous Substances directive and is expected to recommend tweaks that would make RoHS clearer, simpler and perhaps a bit broader. Companies selling electronics products into EU markets should be aware of the possible modifications on the table.
The review comes as the industry witnesses the first prosecution of an electronics company for noncompliance with the RoHS directive now in force.
For more information please visit: http://www.eetimes.com/news/latest/showArticle.jhtml?articleID=202402068
EU and China decide on textile import monitoring system for 2008
Following from their 2005 Memorandum of Understanding on cooperation in managing the transition to free trade in textiles, the European Commission and the Chinese Ministry of Foreign Trade have decided on a system of joint import surveillance that will operate for one year in 2008 following the end of the import growth caps on ten categories of textiles and clothing from China. The 'double checking system' will track the issuing of licences for export in China and the importation of goods into the EU. This monitoring system provides a clear picture of the likely development of trade patterns and ensures predictability for EU businesses. The arrangement covers the eight most sensitive of the ten product categories covered by the levels agreed in 2005 and that will expire at the end of the year. Although imports of these goods will be closely monitored their level of import will not be restricted by this arrangement.
EU Trade Commissioner Peter Mandelson said: "I welcome this further step in the cooperation between the EU and China in ensuring a smooth transition to free trade in textiles. A system of joint monitoring means predictability for EU producers and traders as well as a clear picture of future developments as we make the final step to free global trade in textiles and clothing".
The product categories subject to double-checking will be categories 4 (T-shirts), 5 (pullovers), 6 (trousers), 7 (blouses), 26 (dresses), 31 (bras), 20 (bed linen) and 115 (flax yarn). The system will be formally adopted by the European Commission in the days ahead. It will be administered by EU Member State licensing offices.
Background
Following the final stage of global liberalisation on January 1 2005, textile and clothing exports to Europe from China experienced a very rapid surge accompanied by very rapid drops in unit prices. This surge caused serious damage to many EU producers and precluded any realistic possibility of EU producers adapting to new levels of competition. The EU and China negotiated a Memorandum of Understanding that would cap imports from China at agreed levels each year until 2008. The Memorandum also committed both sides to working for a smooth transition to free trade in textiles in 2008.
The 2005 agreement has allowed textile and clothing exports from China to continue to grow, but at a rate that has allowed EU producers to adjust to new levels of competition. This breathing space created with China in 2005 until the end of 2007 has provided a further opportunity for EU textile producers to adapt to new levels of competition, invest in technological change and innovation and focus on high value added products. Through its Global Europe strategy the European Commission has focused new efforts and new resources on opening new markets for EU textile exports and reducing the level of counterfeiting of European textile goods. Europe is the world's second largest exporter of textiles and clothing.
Implementation of Double-Checking System with the European Union
China Takes First Step for Limiting Textile Exports to the European Union
In order to implement the double-checking system negotiated with Brussels, Beijing just released a series of conditions for exporting to the European Union in the next year. The new rules are prefiguring some additional control of shipments in case textile exports would dramatically surge after European quotas are eliminated on 1 January 2008.
China Wednesday released requirements for exporting to the European Union in 2008.
Textile trade companies will have to comply with a series of condition for getting export licences.
Although quotas will be removed by the European Union, effective from 1 January next year, Brussels negotiated with Beijing a so-called "double-checking system" in order to strictly monitor the level in imports from China in 2008 and rapidly reimpose quantitative limits, if necessary.
Conditions for Getting Licences
Export licences will therefore be issued on China's side, but without limits and under an automated process.
A series of conditions for being granted export licences were however revealed on 17 October, leading to a possible restriction in exports to the European Union.
The system will be managed by the China Chamber of Commerce for Import and Export of Textiles, in association with the China National Textile and Apparel Council and the China Association of Enterprises with Foreign Investment.
In order to apply for export licences, Chinese companies will need complying with following requirements:
1. Have a registered capital of more than 500,000 yuan in mainland China.
2. Having exported textiles and/or apparel in the past two years. A draft document discussed in the previous days required three years of experience, finally lowered to two years.
3. Having exported textiles or clothing to the European Union worth a minimum of US$10,000 in the previous year.
4. Not having violated China's rules related to intellectual property rights or environmental protection in the past three years.
5. Being a member of the China Chamber of Commerce for Import and Export of Textiles.
What Impact?
The impact of such requirement is not easy to evaluate. New rules are a first sign that Beijing will not let exports dramatically surge in 2008 and could take other measures for limiting shipments to Europe, if necessary.
A first removal of European quotas in 2005 had led to a sharp increase in exports with Brussels finally reimposing limits and setting related embargoes at European ports.
Chinese trade associations are expected this week discussing the new system with domestic exporters and European importers at Guangdong's Commodity Fair which is currently taking place.
Under the agreement concluded with Brussels on 28 September, the double-checking system will cover eight categories of products: 4 (T-shirts), 5 (pullovers), 6 (men's trousers), 7 (women's shirts, blouses), 26 (dresses), 20 (bed linen), 31 (bras) and 115 (flax yarn).
Categories 2 (cotton fabrics) and 39 (woven table linen) are excluded, being no more considered "sensitive".
The system is set to expire at the end of 2008, in line with the end of textile safeguards granted to the European Union and the United States under China's WTO accession protocol.
Mandelson strongly critical of Chinese trade policy
EU trade commissioner Peter Mandelson has lambasted China's trade policy towards the European Union, demanding that the country opens itself up for European goods and services or risk facing a protectionist backlash.
Lisbon Treaty made to avoid referendum, says Giscard
The EU's new treaty is the same as the rejected constitution - only the format has been changed to avoid referendums, says Valery Giscard d'Estaing, architect of the constitution.
EU shows strong growth of productivity in 2006
The European Union in 2006 had its best economic performance since 2000 with a growth of the Gross Domestic Product (GDP) of 3%. Productivity, measured by the increase of GDP per employee, grew strongly for the EU-27 with 1,5%, compared to an annual growth rate between 2000 and 2005 of 1,2. Employment growth accelerated for the EU-27 by 1,6%, whilst the average annual rise for the period 2000 until 2005 was 0,5%.
The European Competitiveness Report of the European Commission, presented yesterday in Brussels, also notes that in 2006 productivity grew stronger in the EU than in the US (1,4%), which the Commission hopes will be the start of a long term trend. The growth rates show a widespread improvement, across countries and economic sectors.