Down with barriers, don't be frightened by Peter Mandelson
10 Oct '07
3 min read
Italy's textile manufacturers know better than most the way that China is changing our economic world. Over the last decade, "the china price" has changed their businesses and reshaped their markets. After the full liberalisation of global trade in textiles in 2005, the flood of goods from China was so sudden that the EU stepped in to negotiate a temporary quota system with China on ten important textile products including trousers and t-shirts.
This breathing space has kept the rise in imports from China to a manageable level and given European industry a further period to adjust. European manufacturers have used that time to adapt and restructure.
The quotas will expire at the end of this year. However, our agreement with the Chinese lasts until the end of the 2008. It obliges both sides to work closely together to ensure that the transition to free trade in textiles is a smooth one. We expect concrete cooperation from the Chinese in monitoring exports and ensuring that a glut in the Chinese market does not lead to dumping.
Italian textile manufacturers have been pressed hard by Chinese competition. The Italian model of regional networks of linked factories and small producers has focused and magnified the social impact of economic change in the last decade. But there is also strength in this system. China's current power is in mass production.
Europe cannot compete with China's advantages head-on. But the Italian system is smarter and more creative. It can customise design. It has faster logistics, shorter reaction times and a greater ability to adapt. Features which are key in the fast moving fashion driven textiles business. It has first-class management and leadership.