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EU retailers angered by China textile quota
(FT.com)
Updated: 2005-08-15 07:07
European retailers are sharpening their attack on the European Union's
decision to restrict textile exports from China amid evidence that blocked
shipments of sweaters could lose them euro 800m ($994m) in retail sales
during the autumn and winter trading season, Financial Times reported.
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Chinese shopkeeper arranges textiles in a store in Shanghai in this
February 24, 2005 file photo. [Reuters] | On
Thursday Thomas Ostros, the Swedish trade minister, wrote to Peter Mandelson,
the EU's trade commissioner, highlighting the problems faced by Swedish clothing
companies led by Hennes & Mauritz and warning that, without a rapid
solution, “there is a considerable risk that these companies could bring legal
action”.
His views were echoed by Bendt Bendtsen, Denmark's economics minister, who
wants to discuss changes to the quota system with Mr Mandelson.
The shipment difficulties have emerged because China has already exceeded its
2005 export quotas for sweaters and men's trousers, two of the 10 categories
covered by a China-EU textiles agreement signed in June. The stockpile for
sweaters has reached 55m items, according to the EU's quota-monitoring system,
while retailers estimate the trouser surplus at 11m items.
The developments are a blow to Mr Mandelson, who won plaudits in June for
negotiating a truce with China. However, he angered retailers last week when he
blamed them for “trying to beat the restrictions” by placing massive orders in
the run-up to July 11, when the agreement came into force.
The blocked sweaters are worth euro 200m-250m ($249m-$311m) at cost price
according to the British Retail Consortium, and could run to euro 800m in sales
for retailers across the EU, one senior retail executive said.
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