Blog: Free trade or farce?
Leonie Barrie | 31 August 2005
Having been away on vacation for the past two weeks, it has been something of a revelation to see the column inches and airtime that’s being devoted to the stockpile of millions of Chinese-made sweaters, blouses and bras waiting entry into the EU. It’s rare for any of the issues affecting our industry to garner much interest in the outside world, but this time it’s slightly different – here in the UK at least – for no other reason than the fact that Peter Mandelson’s at the heart of one of the biggest rows over free trade ever to have engulfed the European Union.
For those of you who don’t already know, Mandelson twice resigned from the cabinet in controversial circumstances, only to return to British politics when the furore had died down. So for those watching his tenure as EU trade chief, the latest slip-up has given the British media yet another chance to have a new dig at him.
It has to be said, though, that Mandelson’s handling of the quota crisis has been little short of preposterous. He professes to be a believer in free trade, yet he finds himself at the centre of one of the biggest rows over free trade ever to have engulfed the European Union. He has described as a “serious glitch” the implementation of new quotas on Chinese clothing imports, but he was the one who negotiated the deal and its execution in the first place. He said the resulting problems could not have been anticipated or avoided, at any point in the textile trading cycle. This again is open to question as retailers and manufacturers have had ten years to prepare for the scrapping of quotas and the rush towards Chinese sourcing was hardly a surprise. The Chinese, after all, have only been fulfilling orders.
European retailers have warned of store closures and empty shelves this autumn and winter while garments they ordered many months ago sit at ports and in warehouses across Europe. On Monday, Mandelson claimed that such talk was far-fetched; by Tuesday he was warning of soaring clothing prices across Europe. I could go on…
Of course no one person or group is to blame for the current predicament, although at the heart of the matter there does seem to be a complete lack of understanding of how the clothing trade works. But perhaps the biggest concern is that EU governments seem unclear over how to deal with the problem that they have unwittingly created. There are deep divisions between those keen to protect local textiles industries from Chinese competition, and those who want to ensure that retailers have enough stock for the Christmas shopping period – but it does seem that jumping on the protectionist bandwagon to safeguard the interests of a minority of member states will solve nothing in the long run.
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