The Great Bra War and Sweater Crisis has shown that Europe's retailers can be a lot better at whining than at working professionally together to avoid problems in the first place. Back in April, when the EU made it clear that quotas might be reimposed, Europe's retail industry should have seen the inevitable consequences, reflects Mike Flanagan.

Clothesource Towers, the global headquarters of the mighty Clothesource empire, nestles in England's heart-stoppingly pretty Cotswold Hills. Our incessant travels keep us pretty close to what's going on in the world's major apparel production centres, like Guangzhou and Djkarta. But we rarely come face to face with the buyers or wearers of cutting-edge street fashion brands like Phat or Oakley.

It's a safe bet that we might have to wait several centuries until we see branches of Johnny Handsome in our neighbouring metropolises like Stow-on-the Wold, Moreton-in-Marsh or Lower Slaughter.

Last week though, thanks to the inspired positioning decisions of the MAGIC organisers at Las Vegas, we were living cheek by jowl with these brands. The Clothesource booth, by Las Vegas standards, was almost as close as you can get to MAGIC's Street Smart section.

'Close' at MAGIC means accessible without needing to use the Las Vegas monorail, because MAGIC's biggest problem is finding space for its ever-growing number of exhibitors and visitors. It's long outgrown the 3.2 million square feet of the Las Vegas Convention Center, and it attracts more visitors - now around 100,000 a time - every year.

Industry in decline?
No-one looking at the throngs of designers, merchandisers, buyers, logistics experts and all the other specialist professions attending MAGIC could possibly conclude America's clothing industry was in decline.

Yes, the industry supports ever-declining numbers of sewing machine operators - though US employment data shows that decline is nothing like as severe as many lobbyists pretend. But there seems no stopping the growth of new, sharp, ambitious companies in America's clothing industry. MAGIC attracts 1200 new exhibitors every show, for example.

And that growth is fuelling export growth. Globally-rated fashion academies like New York's FIT and San Francisco's Academy of Art are getting more and more of their students from Asia.

The United States cotton industry will this year sell more cotton to China than to the United States - the first time it's sold more to a foreign country than domestically since the mid-19th century.

(For history buffs: the US cotton industry grew up as a low-cost fabric alternative for the world's then dominant economic power - Britain - to the relatively expensive wool from Cotswold sheep. Thus depriving the Cotswolds of industrial investment for a century and a half and so, by making it now one of the world's most idyllic places to live and work, bringing local unemployment to virtually zero.)

America's real clothing industry
And it's not difficult to be aware at MAGIC of the importance of America's real clothing industry - the one that's growing, and recruiting some of America's brightest young people. Because Laura Jones and her team at the United States Association of Importers of Textiles and Apparel (USA-ITA) - in the booth on the other side of us from Phat - make sure that everyone knows that.

Laura's team are constantly ensuring we all - politicians, journalists and just ordinary apparel industry consultants - properly understand the real clothing business that contributes so much to America.

Through USA-ITA, Americans realise the real clothing industry is a vastly different animal from the dinosaur the country's increasingly defensive - and commercially insignificant - textile industry keeps on portraying as being under threat from foreign imports.

Commercially, there's little difference between the state of the real clothing industry in the US and its state in Europe. On both sides of the Atlantic, the real clothing industry is healthy and thriving. And on both sides, the textile industry persists in pretending the real clothing industry is dying.

And, because of the textile industry's political clout (or maybe just because its management find whingeing about their industry's problems easier than improving their productivity and customer offer), the EU and US governments keep on listening to its nonsense, and allowing short-term limits on imports.

Big differences
But there are two big differences between the situation in the US and Europe.

There aren't millions of bras and sweaters stuck in ports around the world because of a messed-up US government quota deal with China. And European retailers and importers don't have a real equivalent of America's USA-ITA.

The two differences are closely linked.

For those with the patience to go through the 'Great Sweater and Bra Crisis of 2005' again, let's just recap.

According to Europe's retailers, on 10 June 2005, the EU agreed ("without consultation", according to the president of the European retail association, EuroCommerce, Peter Bernert) to limit further imports from China of many apparel categories - to 8 per cent a year in 2005 and 2006 in the case of sweaters, and to slightly higher levels for other categories and for later years.

The limits for sweaters were set preposterously low, mostly because of European officials' bizarre ignorance of the realities of the apparel trade. In the words of Ferry den Hoed, president of the Europe's Foreign Trade Association (FTA): "Goods that were ordered at the end of 2004 and the beginning of 2005 were ordered in good faith in a completely liberalised Chinese textiles market."

Officials seemed unaware that June/July is the peak time for shipping sweaters, and the limits were exhausted within days of being set. Europe's retailers complain they had no warning that limits were about to be imposed, or that they would be so low. As a result, millions of sweaters were made in good faith that could not legally be shipped.

Lack of consultation?
All, claim the retailers, because the EU failed to consult properly. Which would be a disgrace if the retailers' version of events wasn't complete nonsense.

Of course the EU's negotiating officials showed appalling ignorance of an industry - the real clothing industry - that employs millions and in which Europe is in many ways a world leader. Ask virtually anyone here at MAGIC where fashion trends start, and virtually every single one of the 100,000 visitors will tell you it's Europe they look at to start fashions.

Europe's trade commissioner Peter Mandelson showed a dilatoriness, and determination to blame someone else for the problem, that was mind-boggling even by the standards of European officialdom - or by Mandelson's own colourful career of acute parsimony with the truth.

"The sheer scale of buyers' attempts to beat the restrictions has presented governments with immense difficulties," he said "Officials will be working on this throughout August," as if working in August were some cruel and unusual punishment for Europe's officials.

But is there a single reader of this column who's remotely surprised that politicians and officials are unfamiliar with every detail of every industry? That's not what politicians are there for. In a properly run democracy, it's the job of any interest group to understand what politicians are trying to do, and to ensure politicians are properly briefed. That's a job USA-ITA performs extraordinarily well.

But it's a job Europe's retailers have fallen down on spectacularly. Do they understand what politicians are trying to do? Not if we listen to Stephen Marks, from Britain's French Connection. Asked about quota abolition in 2004 he announced: "It's perfectly simple. Chinese wages are low, and we'll be able to make as much as we like there. Don't listen to people trying to make it more complicated."

But it was a great deal more complicated, and if Mr Marks really didn't understand that, his shareholders should have been asking some very pointed questions.

Textile Safeguard clauses
The EU and China agreed back in 2001 that the EU had the right to re-impose quotas under the textile safeguard clauses of China's Accession Treaty to the World Trade Organisation (WTO).

When Mr Marks was speaking, he must have known that the US, with a near-identical textile safeguard agreement with China, had recently re-imposed quota on bras and sleepwear. And most Chinese traders were forecasting that the EU and US would reimpose even more quotas by May or June 2005. Ignorance of legislation is just as great a management failing in a retailer as ignorance of consumer trends.

The textile safeguard agreement is, of course, a ridiculous piece of unnecessary protectionism. But Europe's retailers have known about it for four years - and have had four years to lobby about its implementation and draw up contingency plans. It's clear from the caterwauling coming from them right now that they've completely failed to organise themselves properly.

Ah, but Europe re-imposed the quotas on sweaters and bras "without consultation" didn't it, as Mr den Hoed said?

Not a bit of it. On 29 April 2005, the European Commission invited comments from interested parties on quota imposition for a range of products, including sweaters. In the invitation, the EU made it clear that quotas might be reimposed at a level of 7.5 per cent over previous years, that it would announce its decision by 28 June, and that any new limits would become effective sometime between 12 July and 27 July.

And that's pretty much exactly what the EU did. It consulted interested parties. Eventually, it set limits slightly higher than it threatened, and announced its decision a week earlier than promised. But no-one can say they hadn't been warned. And the day after the EU announced its decision, we emailed all our customers - and put out a press release - setting out quite clearly that a quota famine was inevitable.

But even once it became clear that Europe's quotas were exhausted, importers were still in denial. "It's not a real problem," said one prominent trader. "We simply need to pay a higher import tax, and the garments will be cleared through customs." Which was utter twaddle.

US bra wars
Europe's retail industry saw - or should have seen - the confusion in the US in late 2003, when bra quotas were re-imposed at short notice.

They've had four years to educate the European Commission in the realities of apparel trading. Officials in democratic governments may often be ill-informed, and are frequently a lot less intelligent than they think they are. And, as Mandelson tells us, they seem to see working in August as something they deserve a medal for. But they rarely do truly stupid things unless the affected parties have been wholly negligent in lobbying them.

Every single retailer in Europe was as capable as we were on 30 April of calculating what a 7.5 per cent increase on 2004 Chinese imports meant. They must all have known that, if the EU imposed quotas on the timetable it proposed, no sweater imports would be possible after late July. Not one of them made this point in public.

No-one started a public campaign, forcing Europe's politicians to realise there would be a lack of sweaters as children began returning to school. It's inconceivable America's apparel retailers would have been so negligent in pulling every single possible string in lobbying politicians, officials, and the American public the moment a consultative document like the EU's was published.

And it's just as inconceivable Europe will stop suffering from ill-conceived political mistakes like the current sweater crisis until Europe's apparel retailers band together to form a lobbying group as properly resourced as USA-ITA. Ultimately, those retailers are just as much to blame as our work-shy EU officials for the current mess.

But it's always easier to blame someone else. Who can remember a single European retailer pointing out the inevitable consequences of the textile safeguard clauses in China's WTO treaty? Or any of the retailers now beating their breasts so publicly saying a word back in April, when the EU first asked for input?

The Great Bra War and Sweater Crisis has shown that Europe's retailers can be a lot better at whining than at working professionally together to avoid problems in the first place.

But as many suppliers would put it: what else is new?

Mike Flanagan is chief executive of Clothesource Sourcing Intelligence, a UK-based consultancy that provides the western apparel buying community with objective information on apparel production, trade, price competitiveness, and apparel producers in over 100 countries.