EU and the Chinese Textile Quotas



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Code : ITF0023

Year :
2005

Industry :Textails

Region : :Europe

Teaching Note:Not Available

Structured Assignment :Not Available

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Abstract: The Shanghai Agreement signed between the European Union (EU) and China in June 2005, imposed restrictions on 10 categories of the Chinese textile exports. Prior to the agreement, the textile-manufacturing industries of the European countries (France, Spain, Portugal and Italy) faced competition from the low cost Chinese textile exports. The Shanghai deal helped to protect these European industries. However, the European textile retailers who had placed huge orders with the Chinese manufacturers before the signing of the agreement, were now faced with a shortage of stock supply. Soon after the agreement was signed, the textile imports from China exceeded the prescribed quota levels and European authorities would not allow the excess Chinese goods to cross the European boundaries. By the end of August 2005, more than 75 million Chinese garments were piled up at the EU ports. The governments of the Northern European countries like; Germany, Denmark and Sweden, that were home to some of the biggest European textile retailers, suggested the European Commission make changes to the textile agreement. In September 2005, amendments were made to the agreement and the quota levels of the imports from China were revised. However, the European retailers and the Chinese manufacturers felt that both the countries needed to come up with a better and permanent solution to maintain a long-term trade relationship

Pedagogical Objectives:

  • To discuss how the restrictions on Chinese textiles exports, imposed as result of the Shanghai Agreement signed between the EU and china resulted in losses both to the Chinese exporters as well as the European textile retailers, leading to its revision in September 2005

    Keywords
    European Union (EU), China, Quotas, Tariffs, Textile industry, Multi-Fibre Agreement (MFA), International Trade & World Economy Case Study, Exports and imports, World Trade Organisation (WTO), European Commission, Trade, Textile-Specific Safeguard Clause (TSSC)

    Contents :
    EU-China Textile Trade
    Affects of Increasing Textile Imports
    Negotiations Underway


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