Wed, Aug 31, 2005 - Page 11 News List

Chinese threat to EU textiles exaggerated: analysts


The pictures of Chinese-made sweaters, bras and trousers piled up in boxes in European ports have been a powerful symbol of the "flood" of foreign garments entering the EU.

But the threat to European textile producers -- and especially to European jobs -- is exaggerated, experts say. In fact, those most hurt by Chinese exports are companies -- often European-owned -- producing the same kinds of clothing in North Africa, Turkey and other low-cost countries.

Although imports from China have surged, those from elsewhere have receded, according to data supplied by the EU. Overall clothing imports to the union actually shrank 9.7 percent in the first five months of the year, compared with the period last year.

A top official at the French Trade Ministry -- one of the most vocal advocates of strong European action to block the Chinese imports last spring -- said on Monday that one of the main motivations was to protect European-owned textile producers in countries such as Morocco, Tunisia and Turkey, that had been muscled out by cheaper Chinese imports.

"This is a very important concern for France," said the official, who wanted his name withheld because he was not authorized to speak publicly.

This is not only to protect French businesses in these countries, but to maintain political stability in those countries, he said.

With textiles often the largest employer in those places, "It will create social and political problems if thousands of people become unemployed in Tunisia or Morocco."

French textile manufacturers, by contrast, produce high-end clothing, not T-shirts and jeans, he said.

"This is not politically correct to say, but for the products that we import from China, it's been a long time that we haven't produced those things," he said.

Retailers and importers have warned of shortages in recent weeks as Chinese-made garments have been stuck at European ports. The importers have argued the quotas were imposed too quickly for them to adjust. Retailers apparently rushed to order clothing in anticipation of the quotas, and very quickly hit their ceilings, leaving the clothing stranded.

Peter Mandelson, the European trade commissioner, who negotiated the reimposition of quotas with China in June, said on Monday that he had begun procedures to release the 80 million garments stuck in European ports, without elaborating.

He did not say how future quotas would be affected. European negotiators left Beijing on Monday without an agreement after four days of talks, though the mission there will continue to negotiate.

He also chastised those in Europe who have compared the shortages of clothing facing retailers now with shortfalls during wartime.

"I do not think that the scare stories about clothing shortages comparable to those experienced in the last world war are remotely justified, and I hope such hyperbole can now be put aside," he said.

Laurent Ruessmann, an international trade lawyer at Sidley Austin Brown & Wood in Brussels, Belgium, said the European troubles in implementing quotas were giving pause to negotiators from the US, who are also trying to reach a deal to limit Chinese imports. Negotiations with the US are to begin this week.

Retailers and importers have warned Washington not to act hastily, Ruessmann said.

"They are saying, `Hey, be careful: Don't do the same stupid thing the EU did,"' Ruessmann said. "Make sure you have some sort of transition period."

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