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Strategies & Market Trends : China Warehouse- More Than Crockery -- Ignore unavailable to you. Want to Upgrade?

To: RealMuLan who wrote (5352)	8/15/2005 12:46:30 PM
From: RealMuLan	Read Replies (1) \| Respond to of 6370

Textile trade stitched up as EU politics wade in By Greg Knowler E-mail This Article Printer-Friendly Format The legalities of trade are never straightforward, which is why legions of lawyers are racking up the hours deciphering some regulations and working out ways to dodge others. But even they must be stumped by the endless textile quota saga. If it was only trade, no problem. But with politics queering the pitch, who knows which way the ball will swing. We have to admit that we are confused. This may not be an altogether new state of mind for us, but in this instance we are joined by a bunch of very angry European shippers. Here's the brief background: After the end of global textile quotas on January 1, a flood of Chinese-made garments poured into Europe, prompting fears that EU manufacturers would be driven out of business. Under pressure from the EU, Beijing imposed quantitative quotas on 10 textile items. Then just a month later, the EU stopped issuing licences for one of the items, sweaters, saying the quota for the year was already full. Quotas for the other nine categories are also spilling over, leaving European importers with no way to fill orders for the coming winter season. But after howls of protest, the EU decided to soften its stance on quota restrictions late last month. It will now allow "advance use" of quotas and "inter-category transfers" that will permit the quotas to be transferred from one product to another. The EU will also introduce the Outward Processing Transfer, where Chinese factories will be allowed to make garments using fabric imported from the EU, and then ship the items back to Europe. So let's recap: Quota restrictions on; quotas full; quota bypass surgery performed. Hell of a way to run a trade business. We hope the EU is making it up as it goes along, because it would be deeply disturbing if this was the commission's idea of an actual trade strategy. And never forget that the EU - and the US, for that matter - have had years to prepare for the abolition of textile quotas. Instead, they have been sitting on their digits. Ultimately, instead of protecting Europeans, it is Europe importers that are suffering. Many of the cheap garments, such as the category five sweaters, are not even produced in Europe. The same goes for many of the other categories under quotas, such as socks and trousers. Millions of garments are now stranded at sea, unable to get into Europe. It is the same old story. When elected officials get involved in trade, vested interests come out to play and free trade gets stitched up. There is no stopping China's dominance of the textile and garment industry, and these "finger in the dyke" measures are only throwing the trade sector into confusion. The issue will eventually be settled, but in the meantime it is having a devastating effect on companies at both ends of the supply chain. cargonewsasia.com