Mandelson warns EU of textile shortages

European Trade Commissioner Peter Mandelson today raised the pressure on member states to unblock Chinese garments stuck at EU…

European Trade Commissioner Peter Mandelson today raised the pressure on member states to unblock Chinese garments stuck at EU borders.

Mr Mandelson has begun consulting with member states to prepare the ground for his formal proposal later this week that would unblock millions of Chinese garments piled up in ports after exceeding import quotas.

"The consequences of not doing so will be severe economic pain for many medium and small-sized businesses. It could mean shortages in the autumn and higher prices," Mr Mandelson told the European Parliament's trade committee.

Yesterday he dismissed "scare stories" of immediate clothing shortages on retailers' shelves, but he raised the spectre of empty shelves later in an apparent attempt to galvanise support for his plan to unblock the goods.

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The problem has exposed a rift between EU countries with big retail interests which are keen to ease the import restrictions, and those which still have significant textile industries, which are increasingly threatened by foreign competition.

Talks between China and EU on how to find a formula for allowing blocked goods into the EU immediately - such as using the 2006 quota for 2005 - have not yet produced an agreement.

Mr Mandelson said they were "unlikely to do so immediately given the concentration of China this week in negotiating a similar agreement with the United States".

Chinese exports of clothes to the EU exploded when a former quota system expired on January 1st.

In June the EU and China struck a deal - the Shanghai textile agreement - that limited clothing imports into the EU.

But within weeks, the quotas began to be hit, triggering a halt in the issuance of new EU import licences.