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Mon, Aug 08, 2005 - Page 12 News List

EU quotas strand Chinese goods

STUCK IN TRANSIT Many Chinese garment exports to Europe have exceeded EU quotas, and so are sitting on ships until an agreement can be reached to let them in

AFP , LONDON

EU import quotas on Chinese textiles have stranded millions of garments on ships causing a major headache for big British and European retailers waiting to stock their shelves for the winter season and crucial Christmas sales period, trade sources say.

According to data from the British Retail Consortium (BRC), pullovers, cardigans and waistcoats worth an estimated ?30 million pounds (US$53 million) at retail prices are being blocked from the British market alone.

The 25-nation EU and China headed off a trade war last June when EU trade commissioner Peter Mandelson and his Chinese counterpart Bo Xilai (薄熙來) agreed to limit the growth of 10 Chinese textile product categories to the EU to between 8.5 percent to 12.5 percent until the end of 2007.

On Wednesday the commission said that it had obtained approval from EU member states to allow some flexibility in the way the quotas were applied so that the blocked goods could be released.

The commission said that it was seeking approval from the Chinese for about 9.0 percent of next year's quota for the affected garments to be brought forward to this year to give access to the stranded goods.

A spokeswoman for the British Clothing Industry Association, a London-based manufacturers' body, told reporters that "the quota is already full" for woollen tops, resulting in millions of garments being left on ships at ports across Europe and Asia.

"Most of the [British] high street is affected" by the blocking of the goods, she added, while noting that other woollen goods, notably trousers, were also close to their quota ceilings.

Alasdair Gray, director of the Brussels BRC office, said that the problem was "not just in the UK but throughout Europe. There are lots of companies affected."

The garments were due to be supplied to major European retail groups and wholesalers, he said, adding that in Britain alone 15 retailers were affected.

The senior trade adviser at Brussels-based trade body EuroCommerce, Ralph Kamphoener, told reporters by telephone: "It's a problem that unites all the big retailers but also many of these who are importing and wholesaling the clothing products."

It also had put in jeopardy relations between EU companies and their Chinese producers, Kamphoener said.

He mentioned the names of four leading retailers as examples of companies affected by the problem. One of these, Marks and Spencer in Britain decline to comment, and another, Tesco, the number one British supermarket Tesco, said it had largely overcome the problem.

The pullovers which cannot be imported had all been paid for either through advance payment or with binding letters of credit.

"It's very difficult for those companies who are now unable to honor their commitments with their Chinese partners and that is very much a pity."

Furthermore, the consumer was left to deal with the consequences, he added.

"We will have limited consumer choice and we will have higher prices."

"If the retailers are now having to source the pullovers they were expecting from China from elsewhere, then it's clear that they will not get the same quality for the same price.

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