QUOTAS THREAT RISKS “BRA WARS” REPEAT 

20 July 2007

Retailers are calling on Gordon Brown’s new trade team to stand firm on scrapping EU clothing import quotas or risk another “bra wars” fiasco.

A meeting of EU trade ministers this Sunday (22 July) will discuss extending existing quotas on textile imports from China. The agreement that introduced the quotas in 2005 said they would expire at the end of 2007 but France is expected to table plans to extend them for another year. The British Retail Consortium (BRC) says retailers are now ordering ranges for spring and summer 2008 and want the uncertainty ended with a firm commitment to free trade.

The BRC warns that reneging on the original timetable, ending tariffs this year, risks leaving Chinese-made clothes stranded at sea in a repeat of the confusion involving imports of popular clothing lines in 2005.

This will be the first big test for Gordon Brown’s new trade ministers. The BRC has written to Trade and Consumer Affairs Minister Gareth Thomas saying that they must prevent political developments in France leading to a damaging protectionist spiral.

The brother of new French President Nicolas Sarkozy ran a clothing manufacturer that went bust under the strain of foreign completion. The French Prime Minister and Finance Minister have both said something needs to be done about Chinese imports.

The BRC also points out that, while the European Commission’s own figures show UK shop prices for clothing have fallen by 50 per cent relative to overall prices, there have been only minimal reductions in many EU states. The countries where retailers have not passed on the benefits of globalisation are the ones most likely to urge protectionism.

British Retail Consortium Director General Kevin Hawkins said:  “UK retailers can’t risk next spring’s clothing ranges being stranded at sea through EU members reneging on the original end date for Chinese quotas. The uncertainty must be removed by August with a commitment to free trade. 

“Rather than penalising UK shoppers, EU members should look at why high street clothing prices have not fallen in many EU states. UK consumers have seen global trade brings lower prices.  Average clothing prices are half what they were in 1996 but in France and Italy they have barely changed.

“Ironically China is becoming an increasingly important market for top-end textiles from Italy.

In the end open global competition benefits customers and encourages manufacturers to raise their game.

“Gordon Brown’s team must persuade their EU counterparts to introduce domestic reforms to get real competition into their retail markets rather than continuing to featherbed inefficient European producers.”