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Last Updated: Thursday, 18 August 2005, 22:36 GMT 23:36 UK
Stores angry at EU clothing curbs
By Sarah Pennells
BBC News business reporter

Jeans on sale in France
Chinese clothing keeps European stores stocked but supplies are low
The European Union's efforts to protect its textile industry may be proving too effective and seem to be causing a supply crisis among retailers.

It is a busy time for clothing retailers, who are restocking their shelves with autumn styles.

But millions of jumpers and men's trousers are stranded at ports and airports around Europe after the EU put limits on clothing imports from China.

At the heart of the problem is the European Commission's decision to reintroduce a temporary quota on certain items of clothing for 3 years.

An earlier agreement that strictly governed the amount of exports from developing countries expired in January and the number of clothes coming into Europe rocketed.

'Re-source'

Retailers were expecting the new limits to start on 20 July, but they kicked in eight days early.

The result was that hundreds of millions of dollars worth of jumpers had left China, but were not allowed to enter the EU.

In the UK alone, $90m (74m) worth of clothes are piling up at ports and airports.

If I don't deliver, then I don't get paid
Stuart Peters, knitwear importer

Some retailers are now running out of new autumn season styles, raising problems for them and pushing up prices for shoppers.

"A lot will depend on how quickly they can re-source, but the range may not be what they're expecting and prices might be higher," says Kevin Hawkins, director general of the British Retail Consortium.

A number of British retailers have been investing in China in the last few months, and they say the EU has completely underestimated how important China is as a supplier.

Knitwear importer Stuart Peters Ltd sells clothing to several big High Street shops, and 40% of its clothes are made in China.

"If I don't deliver, then I don't get paid," said Stuart Peters, the firm's boss.

"I have a contract with my supplier. He's done everything he should do. We will have to pay for the goods - I can't let my supplier down. I've been with him too long."

Political pressure

China was granting export licences right until the last minute, which meant that clothes were able to leave the country.

But once Chinese textile exports reached the quota limits, the EU stopped issuing new import licences.

Chinese woman arranges a clothing display
China has become a major low-cost clothing manufacturer

Several European countries, including Germany, Sweden and Denmark, say their retailers will suffer if a solution is not found.

"We've been pressing the Commission to let products come through that are in the supply chain," says Mr Hawkins.

"Give them licences, regardless of what it means for quotas, and then let the quota start from 20 July, which is the date we thought it would start."

Policymakers as well as businessmen have been calling for changes and Germany's Economy Minister Wolfgang Clement has become the latest politician to call for the EU to resolve the growing textile crisis.

The European Commission, the EU's executive arm, says it has kept in touch with the clothing industry at all stages.

But by the end of the week, yet more items such as blouses and bras could reach their quota limits.

When that happens, the Commission will be under more pressure to act.


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