Tuesday, August 09, 2005

economy - New textile quota hurt trade

In Europe trade barriers are perceived as boring technicalities, but four million Chinese sweaters waiting in Dutch warehouses to enter the EU tell another story. It is only the start of a major clash between free trade and bureaucratic quota's. The decade-old quota system was abolished at the beginning of this year and a part of China's accession into the WTO. Traders started to order new products in China, but were surprised when China and the EU agreed on new quota in a transition phase to protect textile industries in Southern Europe.
Sweaters are the first in line, while up to ten products will face new restrictions. But products have been made, transported and often paid before the new system came into place. Now there is a problem.

Update I: More European media find the textile retailers sweating.
Update II: EU trade chief negotiator Peter Mandelson has said there would be a solution for the textile that has already been shipped, according to today online:
"We will not know the full extent of the problem until data has been collected after the middle of this month," he continued, adding that shipments sent between the signing of the agreement and July 11 would be allowed entry into the EU.

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posted by Fons Tuinstra at

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