LexisNexis(TM) Academic - Document
LexisNexis(TM) Academic - Document: "Financial Times (London, England)
September 6, 2005 Tuesday
London Edition 1
SECTION: LEX COLUMN; Pg. 20
LENGTH: 240 words
HEADLINE: Chinese textiles THE LEX COLUMN:
BODY:
China and the European Union have negotiated a ceasefire in the great bra war. That much is good news. With protectionist sentiment on the rise, yet more tensions on textile trade are the last thing a vulnerable world economy needs.
But even Peter Mandelson, EU trade commissioner, will struggle to spin the latest textile deal as a yarn of success. The prospect of millions of Chinese garments impounded in warehouses finally landing in shops is heartening. However, it serves as a reminder of why commitments to limit the growth rate of Chinese exports were a bad idea in the first place.
Like other trade restrictions, such agreements restrict consumer choice and increase prices. But unlike, say, tariffs, they bolster producer profits rather than excise revenues in importing countries. For example, Japanese carmakers did no worse after agreeing to voluntary export restraints with the US in the 1980s. For their American rivals, the windfall profits delayed the day of reckoning. Consumers picked up the tab. The same is true of textiles, with the crucial difference that there are many more buyers and sellers. That makes managing export and import licences an administrative nightmare, which the EU has compounded by, in effect, backdating the original agreement. It is sometimes said that a good bra is more supportive than most boyfriends. Sadly, the same remains true for the commitments of EU trade officials to prop up free trade."
September 6, 2005 Tuesday
London Edition 1
SECTION: LEX COLUMN; Pg. 20
LENGTH: 240 words
HEADLINE: Chinese textiles THE LEX COLUMN:
BODY:
China and the European Union have negotiated a ceasefire in the great bra war. That much is good news. With protectionist sentiment on the rise, yet more tensions on textile trade are the last thing a vulnerable world economy needs.
But even Peter Mandelson, EU trade commissioner, will struggle to spin the latest textile deal as a yarn of success. The prospect of millions of Chinese garments impounded in warehouses finally landing in shops is heartening. However, it serves as a reminder of why commitments to limit the growth rate of Chinese exports were a bad idea in the first place.
Like other trade restrictions, such agreements restrict consumer choice and increase prices. But unlike, say, tariffs, they bolster producer profits rather than excise revenues in importing countries. For example, Japanese carmakers did no worse after agreeing to voluntary export restraints with the US in the 1980s. For their American rivals, the windfall profits delayed the day of reckoning. Consumers picked up the tab. The same is true of textiles, with the crucial difference that there are many more buyers and sellers. That makes managing export and import licences an administrative nightmare, which the EU has compounded by, in effect, backdating the original agreement. It is sometimes said that a good bra is more supportive than most boyfriends. Sadly, the same remains true for the commitments of EU trade officials to prop up free trade."
posted by Eastlaw at 10:05 PM
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