Europe's textile import farce: Is relief at hand?

With up to 70 million items of clothing stuck in transit and six out of 10 import quotas now filled, can some relief to the EU's textile and clothing crisis be at hand? Tomorrow a team of European Union trade negotiators will fly to China to try to resolve the crisis over blocked imports of Chinese textiles, and on August 25 the EU textiles commitee meets.

Meanwhile the Guardian reports that British retailers and importers called last night for immediate action to lift the curbs on cheap Chinese clothes. But have European producers benefited? Not much:

"I don't think a single T-shirt is going to get made in Italy or France or Portugal because of these quotas," said Mark Neale, of the outdoor clothing specialist Mountain Warehouse. "Everybody is trying like crazy to find other countries. I have just got back from Bangalore in India where I was seeking alternative suppliers."

Bloomberg report that Stockholm-based H&M has shifted production to Bangladesh, India and Cambodia in response to the quotas. And the Financial Times' Richard McGregor writes that the Chinese are moving clothing production offshore:

Chinese clothing manufacturers, pessimistic about a resolution of disputes with both the European Union and the US to allow an expansion of restrictive quotas, say they have temporarily moved some operations elsewhere in Asia to beat trade barriers.

...Jack Mao, manager of Shanghai Weixin Clothing Sales, a manufacturer of sweaters for labels such as Hugo Boss ...said his company had been able to offset most of the problem by moving manufacturing to Cambodia, Vietnam and Bangladesh, as have some US companies.

So can we expect an early resolution? Probably not, though some compromises are likely. According to today's Financial Times story (subscribers only) by Tobias Buck and Elizabeth Rigby:

The official added that the Commission would probably seek to inject some flexibility into the June 10 agreement by moving some of next year's quota into this year, or by moving quotas between the different categories. Some categories, such as cotton fabric, are still a long way from breaching their limit. But he insisted there would not be a full renegotiation of the quotas set by the agreement.

It is perhaps significant that a meeting between Peter Mandelson, the EU trade commissioner, and Bo Xiali, China's commerce minister, has yet to be scheduled. In the meantime we can expect more farcical stories like this: Chinese bras wing their way on to EU shelves.

For Claus Walther Jensen, getting his hands on bras for Christmas is one of the most important aspects of running Change, a Danish lingerie chain. That is why the director went so far as to borrow a helicopter on Monday morning to secure one of the last European Union import licences for bras.

“We had 45,000 panties in Christmas colours but their 45,000 matching bras were trapped in a warehouse,” said a relieved Mr Walther Jensen after his helicopter dash.  ...Thanks to Mr Walther Jensen’s imaginative approach, Change will be stocking matching lingerie this year.

Maybe Europe won't go braless after all? At least not in Denmark.

Comments

[Tim Wilson]

Now that we know what the EC wasn't telling us, this story just seems totally farcical. If you look carefully at China's textile export figures and the EU's textile import figures, there's actually very little evidence of a surge in textile imports from China in early 2005. Don't believe me? Have a look at this article here.

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