EU Quotas Criticized As Stockpiles Mount - New York Times
August 20, 2005
EU Quotas Criticized As Stockpiles Mount
By THE ASSOCIATED PRESS
Filed at 4:17 a.m. ET
PARIS (AP) -- Barred Chinese clothing shipments are piling up at European ports, prompting warnings of retail stock shortages and higher store prices just weeks after the EU moved to stem an import surge deemed a threat to jobs.
Amid concern that the European import quotas are doing more economic harm than good, Brussels is facing growing calls for their relaxation, even from France -- one of the strongest supporters of the original textiles clampdown.
Unless the Chinese quotas are loosened, retailers are warning, consumers could end up paying more this autumn for clothes hastily sourced from elsewhere -- as well as enjoying less choice.
The problems in Europe come as Washington is nearing a deal with Beijing on its own temporary import limits aimed at protecting U.S. jobs in the sector. China's textile exports have risen sharply since permanent quotas were abolished on Jan. 1, 2005 -- three years after it joined the World Trade Organization.
The EU halted Chinese imports of sweaters in July and men's trousers earlier this month after imports met the annual quotas agreed with Beijing in a June 10 deal.
Since then, shipments have been stopped and held at ports of entry, although EU officials say they have not yet been able to determine the size of the stockpiles.
Imports of blouses were also stopped Friday, the European Commission said, with T-shirts, bras and linen cloth expected to follow within days.
The commission, which drafted the new quotas agreed with the Chinese in June, said it had not anticipated the glut of imports.
''We knew the quotas would fill up one day, but we didn't expect it to happen so quickly,'' said Rupert Krietemeyer, a spokesman for the EU executive.
Earlier this month, Trade Commissioner Peter Mandelson won backing from EU states to increase the 2005 quotas for pullovers as stranded shipments mounted, and Krietemeyer said possible quota relaxation for other garments would be discussed at a meeting of trade officials next week.
''We know the situation is very serious for the importers and we're trying to help them,'' Krietemeyer said.
But importers also bear some responsibility for the chaos, he added. ''The retailers knew about the quotas but ... they continued to order articles from China without any licenses.''
The CNSH French clothing retailers' association -- which represents retailers including Etam and Kookai -- blamed the EU for the disruption.
Retailers had built the long-agreed liberalization of Chinese textile imports into their sourcing plans, said CNSH Executive President Jean-Marc Genis. ''Companies went to China to buy more goods, then all the rules changed. The orders had been placed and paid for last year.''
Some retailers say they managed to anticipate the new temporary quotas and to source elsewhere, but others claim the hitch could leave damaging holes in planned autumn and winter lines.
''The potential consequences are that there will be shortages on the shelves,'' said Genis. ''Retailers will go rapidly to other sources, the prices will go up and the customer will pay -- and he will not necessarily find the right goods.''
Next week's debate among EU governments on whether to relax the restrictions -- for example by bringing forward part of the 2006 quotas to this year -- promises to be animated.
In an open letter published Thursday by the Financial Times newspaper, trade and economics ministers from the Netherlands, Denmark, Sweden and Finland backed calls for a re-examination of the Chinese quotas, which they said had been imposed ''without proper regard for the realities of modern commerce.''
German Economics Minister Wolfgang Clement also warned Mandelson that the restrictions could do ''major damage to manufacturing and trade in Germany.''
Italy, which had campaigned fiercely for the quotas earlier this year, said more data should be gathered before they were relaxed. Deputy Trade Minister Adolfo Urso said Thursday that most EU states would back Italy against ''those European governments that have taken it upon themselves to represent the interests of a few big retailers.''
But France, which also pushed hard for the June quota agreement, called this week for a more ''pragmatic'' approach to its enforcement as the complaints from its own retailers grow louder.
''If we have tens of thousands of pullovers backed up at our frontiers, it's not very reasonable to apply it in a completely orthodox way,'' Trade Minister Christine Lagarde told a news conference.
In the United States, where cheap Chinese clothing imports have been a boon to consumers but battered domestic manufacturers, trade officials say they are close to a deal on temporary quotas with China after the latest round of talks closed Wednesday in San Francisco.
Associated Press Writer Aoife White in Brussels contributed to this report.
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