EU warned of clothing shortage

Brussels, August 31:

Peter Mandelson, the EU trade commissioner, executed a rapid U-turn yesterday and warned of clothing shor-tages and higher prices for Europe’s consumers this autumn unless member states agreed to free 80 million items of Chinese imports stuck in European ports. Less than 24 hours after he ridiculed ‘scare stories’ about possibly being on a par with second world war rationing, Mandelson was forced to backtrack as he sought backing for a deal that would extricate Brussels from its trade dispute with Beijing. Mandelson, who is under fire from retailers and business organisations across Europe for his handling of the textiles crisis, is to present his proposals to ambassadors of the 25 EU countries this morning, hoping for support before submitting them to his fellow commissioners tomorrow.

The trade commissioner’s comments came as negotiations resumed in Washington between China and the United States over the temporary quotas imposed by the Bush administration to protect American textile companies following a surge in imports this year. Both the EU and the US have seen cheaper Chinese garments undercutting domestic producers since the final phasing out of the multifibre agreement, which had set quotas on foreign imports, on January 1 this year.

Mandelson told the European parliament’s international trade committee that the accord he negotiated with the Chinese in June, li-miting growth in 10 items to between eight per cent and 12 per cent a year for three years, would be unsustainable unless the backlog of blocked goods was cleared. Without this, he said, there would be “severe economic pain” for many smaller and medium-sized retailers. “It could mean some shortages during the autumn but, even more likely, higher consumer prices for many of our citizens who cannot afford to pay more for them.”