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 Time reported.

A 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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