The China syndrome

news: The China syndrome

PETER MANDELSON has been an EU Commissioner for a mere 10 months, but already the knives are out.

In January, as part of world trade negotiations, export quotas were lifted for certain clothes made in China. Millions of cheap cotton and woollen items were suddenly available to be exported anywhere in the world.

The garment manufacturing industry in the EU belatedly suspected that their own businesses might be under threat, even though any imports from China were more likely to displace imports from countries such as Bangladesh and India, rather than higher value home production from Spain, Portugal, France, Italy and Lithuania. These countries urged Mandy to secure ‘voluntary’ limits on Chinese textile exports into Europe. Eager to find friends, especially with the ever-protectionist French, Mandy readily gave in – only to find that he picked the wrong friends.

Increasingly in Europe, not just in the UK, jobs are growing in retailing rather than manufacturing. Retailers place their orders months in advance and it is these orders that were blocked without warning because the import limits for the full year 2005 were reached within weeks.

Mandelson is supposedly Commissioner for Trade, not for Protectionism. But instead of championing the free market and promoting jobs, he clamped down on consumer choice and risked stitching up EU jobs instead. Small retailers, who could not suddenly switch suppliers, were the most vulnerable. They feared they might literally lose their shirts as a result of Mandy’s woolly thinking.

A new deal has now been struck, with the quotas for this year extended with only half the increase being docked from next year’s allowance. The Chinese must be laughing their socks off.

The Commissioner’s initial reaction to the problem was that, of course, it was not his fault. He claimed the blame lay entirely with Member States, in supplying incorrect information on retailers’ ordering patterns to the Commission in the first place. There should be no surprises here – the Commission has a habit of refusing responsibility for error.

But whether or not Member States share any blame for getting the numbers wrong, they should carry all the blame for getting the choice of Commissioner wrong. Too many countries regularly choose a failed domestic politician as Commissioner. When José Manuel Durão Barroso was nominated as Commission President, he pointedly asked Member States only to send their brightest and best as candidates for commissioner. It didn’t happen.

These key jobs generally go to people who have never run a whelk stall. The result is that more and more companies in the real world get their knickers in a twist as bloomers are made. They are right to be ‘shirty’. One can only hope that future governments, of whichever colour, will cotton on.

Every good wish

Philip Bushill-Matthews