ECONOMY

Greece sticks to textiles agreement

Despite a recent agreement (signed on June 10) between the European Union and China with which the latter agreed to limit exports in 10 categories of textile products, there are voices within the EU for a unilateral withdrawal from the agreement. About 70 million items of textile products made in China have piled up at EU member states’ customs offices. Despite the effect of cheap Chinese production on the local textile industry, Greece believes the EU should honor its commitments, Giorgos Mergos, general secretary at the Ministry of Economy and Finance told Kathimerini. «Our country’s position at the Textiles Commission is that calls to withdraw from the agreement are excessive and would do no good to the credibility of the union. On the other hand, demonstrating a degree of flexibility is important in order to provide a smooth solution,» Mergos says. He adds that the June 10 agreement itself was signed under pressure from European textile industries who suffered from the impact of the end of import quotas at the beginning of the year. «The (June 10) agreement was signed after a concerted pressure (on China) by several EU member states, Greece among them, but also France, Italy, Spain, Portugal, Belgium and Ireland. Recently, however, there has been a coordinated effort by big commercial groups to abolish the agreement. They claim that they face problems in their operations and supplying the market because, in many cases, the quotas (of Chinese products allowed) have been filled. We should remark here, however, that the filling of the quotas is neither strange nor undesirable. Otherwise, they wouldn’t exist,» Mergos says. Greece faces only a small part of the problem: specifically, 196,867 sweaters, 95,647 pairs of men’s trousers and 3,300 shirts are blocked at customs points. Some governments – notably Germany, the Netherlands and Denmark – are backing up the calls to withdraw from the agreement and some textile industries have threatened legal action. «If we do want to help the European industry to survive the new, globalized economy, we have to give it some time to prepare for the new reality,» Mergos says, adding that this is entirely compatible with World Trade Organization regulations. It is true that, following the abolition of import quotas on January 1, 2005, imports of Chinese textile products in the EU rose 130 percent in the first half of the year, to $8.65 billion. «This led the European Union to conclude the agreement with China, on June 10, imposing quotas on 10 product categories. The aim was to provide breathing space to the European textiles sector for a smooth adaptation to the new environment,» Mergos says. The top-ranking official believes that claims by EU industries for a lack of products at the market are groundless. «They knew what the abolition of quotas entailed and they knew about what China’s joining the WTO entailed,» he said. «In any case, the measures (agreed on June 10) are temporary, they are merely designed to provide a respite for a period of 2-3 years.» In Greece’s case, several textile firms have made steps towards improving their competitiveness. «They are not that many, but they have greatly improved their efficiency and their results,» Mergos says.