Mandelson's Plan to Unravel Textile Import Dispute

Strategic Insights -

Peter Mandelson, the European trade commissioner, proposed a solution to the ongoing dispute over Chinese textile imports on Sunday, promising to release 80 million Chinese-made sweaters, trousers, and bras held up in European ports within a month. The proposal comes after a team of European negotiators has been in Beijing for four days, attempting to loosen the quota system. The sheer volume of the disputed clothing and possible opposition by European governments, particularly Italy and France, threatens to undermine the plan. Mandelson blamed European governments and Chinese authorities for issuing too many import and export licenses, urging them not to block his proposal.

Key Takeaways:

  • The disputed clothing blocked in European ports includes 47.7 million sweaters, or over one for every 10 citizens of the European Union.
  • Mandelson's proposal aims to clear the backlog of 80 million garments, which are currently held at customs.
  • The European Commission reconvenes in Brussels on Monday after its summer break, with no clear indication of the outcome of the negotiations.
  • Italian and French governments have been the strongest defenders of the quotas, while northern countries have warned that the blocked items damaged the retail sector.
  • An official at the French Trade Ministry stated that France will examine the proposal but is reluctant to do anything that would impinge on the "spirit" of the pact limiting Chinese textile imports.
  • Mandelson sought to mend fences with retailers, stating that they should not be unfairly penalized, a reversal from his previous statement on August 9.
  • Stuart Newman, a legal adviser at the Foreign Trade Association, criticized Mandelson's inconsistency in his statements and proposals.

Statistics:

  • 47.7 million sweaters are among the 80 million garments held up in European ports.
  • Over one in 10 citizens of the European Union is represented by the 47.7 million sweaters.
  • The European Commission reconvenes in Brussels on Monday.
  • The agreement with China took effect on July 12.
  • Quotas were filled in six categories: T-shirts, sweaters, trousers, women's blouses, bras, and flax yarn.
  • Mandelson has been critical of importers, stating that they were "trying to beat the restrictions" on August 9.

Sources:

  • The New York Times, August 14, 2005
  • BBC Television, August 14, 2005
  • The European Trade Commission, European Pressphoto Agency, and Agence France-Presse, August 14, 2005