The removal of EU quotas on textile imports from Asia on 1 January 2005 will have no major impact upon German textile manufacturers and their employees according to a report released yesterday by Brussels think tanks.

But clothing manufacturers are expected to come under pressure once quotas are removed, although most of their production has already been relocated to low-wage countries in central/eastern Europe.
The study was commissioned by the German Ministry of Economics, German textile industry and trade unions and was carried out by the Centre for European Policy Studies (CEPS) and European Public Policy Advisors (EPPA).

While some segments of the textile industry still need to adapt to an increasingly competitive environment, most segments have restructured over the past decades and have shifted their focus on new innovative products where competition from the Far East is low. These include technical textiles, were Germany is a world-market leader the report said.

It is widely feared that the removal of quotas will lead to a massive increase in cheap imports into the EU. For textiles, however, the study found that only a small share of EU quotas do actually restrain imports, although the situation is somewhat different for clothing where one-fifth of quotas had a restrictive impact. 

"Policy makers can rest assured that the elimination of import quotas will be less of a danger for textile industry in Europe than often feared," the report says. "They should thus continue to pursue trade liberalisation in this field, while also trying to open up foreign markets for EU products - both through the WTO Doha Round and through bilateral negotiations."