EU Commissioner Seeks to Raise Chinese Textile Quotas

European Union Trade Commissioner Peter Mandelson backtracked on limits on textile imports from China, asking the EU’s 25 national governments to increase quotas on clothing including sweaters, shirts, trousers and bras.

Mandelson sought approval to add 140 million extra garments to allowances approved in June, according to a copy of his draft proposal. His plans would almost double the number of Chinese sweaters permitted to enter the EU and boost the limit on men’s pants by a quarter.

“A considerable amount of goods are blocked at ports, which creates unexpected difficulties for the normal conduct of trade,” he wrote.

The swift filling of quotas, imposed to protect manufacturers from a flood of Chinese imports, caught Mandelson by surprise and prompted complaints from retailers such as Hennes & Mauritz that have as much as 400 million euros ($493 million) of orders banned from reaching European shops. Countries including Sweden, Germany and the Netherlands sided with importers and pressed Mandelson to raise the limits.

“Clearly, there’s been a misunderstanding by the authorities about how the retail cycle works,” Marks & Spencer Chief Executive Stuart Rose said.

The gains to shops and consumers may come at the expense of European manufacturers, whose products are being displaced by cheaper alternatives. Italy, Spain and France led calls for the restrictions to protect jobs at companies such as Milan-based textile maker Marzotto after the end of a four-decade-old global quota system last year.

Mandelson this week failed to win agreement from China to write off some of the 2006 quota against this year’s increases. Wednesday’s document urged governments to allow in the blocked shipments without waiting for any concessions the Chinese might grant later.