EU Trade Commissioner Lamy in Brussels announced that Chinese textile products will be removed from the European Union's Generalized System of Preferences (GSP) list due to strong competition of Chinese textile products and clothing on the EU market.

According to Xinhua News Agency, Trade Commissioner Lamy explained the new GSP regime will aim to benefit more vulnerable developing countries. With the market share of Chinese textile products and clothing increasing rapidly on the EU market, it seems unfair to allow China continued trade preferences.

The European Union first implemented the GSP scheme in 1971, allowing developing countries access to the EU markets at a lower than normal duty rates. The EU's GSP is implemented every ten years [for general guidelines to be drawn up]. The current GSP scheme is effective until the end of 2005.

The current average duty rate for textile products and clothing is 9 percent. However, China's related products enjoy preferential duty rate of 20 percent less than the average.