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ReturnAsia textile exporters hail EU-China deal
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2005-09-09 15:45:00
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SINGAPORE: Some Chinese textile exporters might be expecting the worst but others in Asia welcomed on Tuesday a deal to button down Chinese exports of sweaters, trousers and bras to the European Union next year.
Sri Lanka, which earns almost half its total export revenue from textile exports, saw Monday’s deal between the European Union and China to resolve a textile stockpile at EU ports as an opportunity to aggressively target EU markets.
“This EU decision ... they are curtailing the quantum that could be exported by China,” Tuly Cooray, General Secretary of the Joint Apparel Association Forum, the island’s largest textile industry group, told Reuters in Colombo.
“That means we do have that much more access to the market ... It’s great news,” he said. Sri Lanka earned $2.8 billion from textile and apparel exports last year and exports to the EU and United States had seen a small but healthy increase from January to June this year. On Monday, the EU and China agreed to share the burden of unblocking millions of Chinese garments sitting on EU docks since they were impounded for exceeding quota levels agreed in June.
About half the more than 80 million sweaters, T-shirts, bras and other items will be deducted from China’s quota for exports to the EU in 2006 and the rest will be added to its 2005 quota. The deal will halve the growth of China’s sweater exports to the EU in 2006 to five percent and snip increases in sales of bras and trousers to just over 7 percent from 10 percent.
Some Chinese exporters said the deal would make life tough.
Shi Feng, an executive at Ningbo Jie Sen Textile Import & Export Co. in the textile-production hub of Ningbo in southeastern Zhejiang province, said orders from Europe had been declining for months and her firm had halted production at several factories.
“Big losses”: Finished products were also piling up in warehouses. “So we’ve taken big losses,” she said.
Other Chinese exporters said they were already scouting alternative markets such as Australia, but others did not think EU importers would turn to cheaper suppliers such as India because they valued quality, service and long-standing relationships.
India was seen perhaps the principal beneficiary of the curbs on the growth of Chinese textile imports into the EU.
“Right now there is around 20 percent annual growth in textile exports to the EU (from India),” said D.K. Nair, Secretary-General of the Confederation of Indian Industries. “Restrictions on China will further improve it but it is difficult to quantify it immediately,” Nair said, adding exports from Pakistan and Bangladesh would also receive a boost.
European Union states seemed likely to back the agreement reached by the European Commission and China, a Commission spokeswoman said. “The agreement with China is still subject to approval by member states. The first signals we have received from member states appear to be positive but member states must have proper time to study and absorb the agreement,” the spokeswoman said.
Some European lawmakers said the EU must avoid the appearance of hypocrisy. reuters
