Blog: Better the devil you know
Leonie Barrie | 9 July 2007
Europe's temporary quotas against ten categories of clothing and textiles from China are due to be lifted at the end of 2007, and already there are rumblings of dissent from some of the EU’s more protectionist quarters about extending the date back to 2008. But although it’s not clear-cut what will actually happen at the end of this year, it’s also unlikely that true free trade between Europe and China will be unleashed.
The consensus from those in the know, however, is that if restrictions are going to continue in some form or another, then there are worse things than quotas for the industry to contend with. Clothesource’s Mike Flanagan suggests these include anti-dumping rules – and all manner of other ‘Trade Defence Instruments’.
But the EU and its trade commissioner Peter Mandelson don’t like quotas, so it’s a fair bet they’d prefer to hit China for trade abuses rather than discriminate through safeguards. And as Emma Ormond, international trade consultant at PriceWaterhouseCoopers told delegates at this year’s Prime Source Forum, there is a precedent in footwear [last year, anti-dumping duties were imposed on leather footwear imports into the EU from China and Vietnam] and it’s more than likely a new anti-dumping investigation opened on any category will go through.
Which means apparel importers could be stuck between a rock and a hard place if they don’t take action soon: between quotas on the one hand, perhaps extended to new categories, and anti-dumping duties on the other. All of which leads to uncertainty.
So what can European retailers, importers and suppliers do if they want to avert a repeat of 2005’s ‘bra wars’ fiasco? The advice seems to be get involved and be prepared. Start lobbying politicians, fight for a lower anti-dumping rate than the competition, and be ready to counter any investigations that are initiated. Again there is a precedent here in footwear, where anti-dumping duties were lower than expected and imposed for just two years.
The real danger lies in doing nothing; if companies don’t react now, the European Commission will think they don’t care.
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