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Thu, Sep 08, 2005 - Page 12 News List

Big European retailers unhappy with China deal

TEXTILES The Foreign Trade Association said EU officials have backtracked on a pact to allow goods that had already been paid for entry into Europe


Leading European retailers accused the EU on Tuesday of granting some textile-producing nations special incentives to win their backing in negotiations with China to unblock piles of garments impounded at Europe's borders.

EU governments yesterday backed the deal struck on Monday between EU Trade Commissioner Peter Mandelson and China's commerce minister to allow half of the excess garments into the market outside quota rules, and half to be counted against limits for this year and next year.

Under EU procedures, the final word to release the goods will come early next week.

"The member states have given a green light to the commission to pass this regulation, and the commission will now do all it can to make sure the regulation is adopted as soon as possible," EU spokeswoman Francoise Le Bail said yesterday.

The EU's 25 members needed to clear the deal before the clothing can go on sale in European stores.

However, the Foreign Trade Association, representing leading European retailers, said on Tuesday that it believed that the EU had backtracked on an agreement to allow in Chinese goods that had already been paid for by retailers. Instead, the association said, the EU appeared to have secured the agreement of textile-producing countries such as France and Italy by keeping the barrier against the importation of such goods.

"Our members are losing out on this," said Stuart Newman, the association's legal counsel.

The agreement was aimed at ending a long-running dispute that has embarrassed the European Commission and thrown relations with China into uncertainty.

But the powerful European retail lobby accused the commission of poorly managing the situation, which led to millions of Chinese-made bras, sweaters and other garments being blocked at European ports.

The association said members were already dispatching buyers to other parts of the world to make up for goods they could no longer buy from China. They said this would mean higher clothing prices in stores. They also warned that Europe could face shortages next year because of the reduced Chinese quotas for next year.

"For the summer, we will be OK, but for the second half of next year it will be a big problem again," said Ferry den Hoed, the president of the association.

The association argued that the commission had based the quota system on wrong numbers for the amounts of goods being imported from China. Leading officials, like Mandelson, were absent on vacation at crucial times, the association said.

"It was badly managed," said Jan Eggert, secretary-general of the Foreign Trade Association, which represents big retailers like Metro, the retail chain based in Duesseldorf, Germany.

"The services were on vacation. It was impossible to see anyone; I don't know any national governments that would do that. We had several weeks when it was extremely difficult to get through to the interlocutors at the commission," he said.

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