By Maxine Frith, Social Affairs Correspondent
27 August 2005
The human cost of the "Bra Wars" crisis between China and Europe can be revealed today.
More than 80 million items of clothing destined for Europe are in limbo, their import blocked by hastily imposed EU quotas designed to protect the continent from the recent deluge of cheaper Chinese goods.
Retailers say that the quotas inhibit free trade and will hit consumers hardest, through price rises and shortages of jumpers, trousers and lingerie. But the real victims of the cut-price clothing wars being waged on the British high street - and the trade row between the EU and China - are the poorest nations.
Campaigners say that the scrapping of textile trade rules eight months ago has the potential to destroy the economies of tsunami-hit countries such as Bangladesh, while the EU quotas are only designed to protect rich countries such as France and Italy, rather than help those worst hit by the situation.
Campaigners said that Western demand for cut-price clothes was fuelling a vicious circle of supply-chain switches, wage reductions and worsening labour conditions across the world. Amy Barry of Oxfam said: "Big companies that pile on the pressure down the supply chain must take some responsibility for labour abuses that occur in developing countries. Consumers too, should ask what are the implications of their demands for the latest fashion at bargain basement prices? It is simply unsustainable to keep demanding that suppliers deliver goods quicker, cheaper and with more flexibility. Ultimately, someone will be paying the price, and more often than not this person will be a vulnerable worker at the end of the supply chain."
The crisis has its origins in the scrapping, at the beginning of this year, of the Multi Fibre Agreement (MFA), which set quotas on how many garment items could be imported from individual developing countries into the US and Europe.
Cheaper labour and manufacturing costs mean that China can undercut other countries by up to 25 per cent, so hundreds of retailers switched production there from 1 January. As a result, garment imports from China soared by up to 1,200 per cent, with more than 7 billion extra items expected this year.
Within months, at least 50,000 jobs were lost in traditional textile countries as factories closed down, and more than one million jobs could eventually be lost in countries such as Bangladesh, Sri Lanka and Cambodia, according to the United Nations. Some of the poorest nations have lost 10 per cent of their export earnings in the past eight months alone.
But it was only when firms in Italy and France began shutting that the EU acted. In July, it imposed quotas on 10 categories of garments coming from China. By then, millions of goods were already made up and on the way to Europe, and are now awaiting the results of negotiations between Chinese and EU officials.
Campaigners say that the quotas will do nothing to help poorer countries. Ms Barry said: "This is protectionism at its worst. European countries preach to the developing countries about opening up their trade, then go and do something like this to protect their own member states."
Neil Kearney, general secretary of the International Textile, Garment and Leather Workers' Federation , said: "Our concern is that countries are trying to undercut China and each other by increasing hours and reducing wages. Garment manufacturing used to be an economic powerhouse for poorer countries - a way of improving their lot.
"Now the people who work in these factories are on subsistence living, and the undercutting means these nations cannot lift themselves out of poverty."
While they differ on the solution to the problem, charities, unions and retailers are agreed on one thing - that the situation has been badly mismanaged by the EU, including Peter Mandelson, the trade commissioner.
Oxfam says the MFA should have been phased out, with Western assistance for poorer countries to adapt their industries.
Retailers argue that trade should be completely liberalised with no quotas.Alisdair Gray, director of the British Retail Consortium (BRC) in Brussels, said: "We were not consulted at all about the way in which the MFA was scrapped or the quotas were brought in, and the officials in Brussels seemed to have no idea about how our industry works.
"Clothes are clearly labelled and if someone doesn't want to buy a T-shirt from China and instead pay twice as much for a European-made product, they can go and do so."
