Textile industry gets the jittters as end of quotas approaches

The Association of Greek Textile Manufacturers (SEVK) said yesterday the government must be alerted to the seriousness of the consequences that the abolition of import quota restrictions on textile goods into the European Union as of January 1 will have on employment and the country’s exports. SEVK Chairman Eleftherios Kourtalis told a press briefing that production by the Greek textile industry – the largest manufacturing sector in terms of both jobs and exports – shrank 8.2 percent in October alone, while that of the clothing sector as a whole was down 14.6 percent. The decline for the year as a whole will be much larger and it appears the future will be even bleaker after the abolition of the quotas, he said. «Imports from China and the illicit trade in textile goods are growing steeply, despite the valiant efforts of the Development Ministry,» said Kourtalis. He noted that the problem has intensified due to the participation of suppliers of Chinese-made products in the procurement tenders of the armed forces. Kourtalis said the stiff labor regulations in force exacerbate the problem by hampering cost effectiveness. «The current law is outdated in the present system of the globalized labor market, hitting industry’s competitiveness and thwarting investment,» he said, warning that many small and medium-size firms are bound to close in 2005, with an estimated loss of 10,000 jobs. Appeal letter SEVK and other representative bodies of the industry are joining respective European organizations, such as the Brussels-based Committee of the Cotton and Allied Textile Industries (Eurocoton), which represents textile companies in the European Union, Turkey and Switzerland, and the European Apparel and Textile Organization (Euratex) in a letter of appeal to the EU Council. The letter welcomes a recent statement by the European Commission on the future of the textile and apparel industries after 2005 as a first step toward the implementation of recommendations made by a high level group set up for the purpose, which will «formulate a whole of preventive commercial, industrial, social and regional measures in order to deal with the new challenges.» Nevertheless, it calls on all countries hit by the new regime to ensure, in close cooperation with the Commission before January 1, that imports will be effectively controlled in all countries as regards both prices and quantities, and that there be clear instructions and criteria to facilitate immediate protection in the case of abnormal increases in the volume or reductions in the prices of imports. The letter also calls on the EU as a whole to commit itself to fighting unfair trade practices whenever the need arises, to intensify its efforts for the same basic labor models to be established in all countries and to follow an active policy regarding access to markets outside the EU through the pursuit of comparable tariff levels with those of the EU. It stresses that the appeal is not directed against the Chinese textile industry or its workers, but is a call to action for dealing with those Chinese enterprises that engage in unfair trade and social practices, threatening the stability of the European textile and apparel industry. Eurocoton, Turkish, US and Mexican textile manufacturers associations in March jointly appealed to the World Trade Organization for a delay in the removal of quota restrictions due on January 1. In July, representatives of the Global Alliance for Fair Textile Trade (GAFTT) and Euratex, representing 65 developing and developed countries, who met in Geneva, «reaffirmed their grave concern that the final phase-out of quotas would lead rapidly to a situation in which major markets will be dominated by only one country, China.» Eurocoton has noted that China has captured 60 percent of the US market for textile categories for which quotas have already been eliminated.