Blog: Leonie BarrieEU debates its textile future

Leonie Barrie | 30 June 2004

As I write this, policy-makers, businesses and other groups will be ending a day-long meeting in Brussels where they have been discussing ways to boost the competitiveness of the EU textiles and clothing industry after quotas are scrapped next year.

EU Trade Commissioner Pascal Lamy has already quashed calls for the EU to lend its support to an extension on quotas, saying that the “EU will stand by the commitments we took in 1995 in the WTO to phase out all textiles quotas by 1 January 2005. Our market will remain open to imports, especially those from the weakest developing countries, but we also need to ensure that third countries reduce barriers to EU exports of textiles and clothing. We will also remain vigilant to act against unfair trading practices.”

Many are already reading between the lines. Will the EU instead raise new restrictions on China’s cheap exports, including trade barriers and tariffs? The evidence suggests it will. For instance, as a designated "poor country," China receives rebates on import duties into the EU and it seems likely these will be scrapped to make way for more needy recipients like Cambodia and Bangladesh. The EU will also want to see greater transparency in Chinese textiles pricing.

In short, the EU will use whatever means it can to boost its own textile industry. And there is still a lot at stake. The EU is the world's biggest exporter of textile products and the second largest exporter of clothing products after China, employing 2.7 million workers and generating a total turnover in excess of €225 billion in 2003. But will it be able to make its changes before the quota system expires in December? It seems unlikely: the Commission will prepare a report by September but it is doubtful EU ministers will vote on the proposals before the end of the year.


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