A report issued today by the European Commission reveals that over 330 trade restrictive measures have been taken by the European Union’s major trade partners since the global financial crisis of 2008.
The report covers 30 of the EU's trading partners over the two year period from October 2008 to September 2010. According to the document, textiles and clothing are amongst the most affected sectors.
Despite being in contravention of the G20 commitment made at the London Summit in April 2009 to rectify the measures, only 10% have been removed. In fact, between May and September this year, 66 new trade measures were introduced. Ahead of the G20 summit in Seoul in November, the European Commission is calling for the removal of the remaining restrictions in order not to undermine the financial recovery.
Currently there are 35 potentially restrictive measures affecting the textile and clothing sector, 15 originating from Argentina alone, which from October 2008 onwards has implemented non-automatic licenses on textile products and footwear.
Since June 1 2010, the Ecuadorian government has imposed specific and ad valorem tax duties on footwear, clothing and textiles. The effect of the measures is a fee of $6 on the import of each pair of shoes, plus a 10% charge on the value of the goods. Ecuador also imposes a tariff on clothing and textiles of $5.50 per kilo plus a 10% surcharge.
Legislation adopted from May 21 2009 onwards, compels South African public institutions to only procure textiles and clothing manufactured locally by companies in compliance with national tax and labour laws.
In Indonesia, a decree remains in place imposing stringent requirements on textile imports. Since January 1 2009 textile imports are subject to licenses, must undergo pre-shipment inspection and can only enter the country through six seaports and international airports. These restrictions are however scheduled to expire on December 31 2010.
Following the increase of cotton prices, the Indian Ministry of Textiles decided to suspend the registration of export contracts on April 19 2010, effectively banning exports of cotton, until further notice. Ten days earlier, the government also implemented an export tax on raw cotton and cotton waste at Rs 2500 (€40) per tonne.
Although the Indian government introduced a stimulus package to benefit exporters on March 31 2010, incentives for the ready-made garment textile market ended in September. The incentives for electronic, engineering and agro-chemical goods, however, continue for 2011.
The Berry Amendment, which was extended on September 15 2010, requires the US Department of Defence to only procure textiles, clothing, tents and cotton, from domestic sources. This legislation does however call for consistency with international obligations. Karel De Gucht, EU Trade Commissioner, said: "With the economic recovery still fragile, the world's major economies must remove the trade restrictive measures that put a break on growth. For the world economy to move forward, we have to roll back these barriers. The G20 summit in Seoul needs to demonstrate leadership in this respect."
