This essay is going to examine the recent troubles about immensely increasing textile exports from China into the European Union, which were also called the “bra war”. After the liberalization in that area since the beginning of this year, the EU felt it needed to guard its textile industry from cheap Chinese imports and set up protectionist measures in summer, which meant that a huge amount of textiles stuck at the customs. A solution was only found in September. The questions which will be addressed in that essay are: What has led up to that situation? What is the legal and economic background? Which kind of trade policy is in the best interest for the European Union?
Table of Contents
1 Introduction
2 What has happened in detail?
3 What has led up to this situation?
4 What is the legal and economic background?
5 What does that mean for EU trade policy?
Objectives and Topics
This essay examines the trade tensions between the European Union and China in 2005, commonly referred to as the "bra war," exploring the causes, legal frameworks, and long-term implications for EU trade policy.
- Analysis of the 2005 textile market liberalization and subsequent surge in Chinese imports.
- Evaluation of the EU's protectionist response and the resulting diplomatic compromise.
- Examination of WTO regulations and the historical context of the Multifibre Arrangement.
- Discussion on the balance between industry protectionism and free trade principles in the EU.
Excerpt from the Book
What has happened in detail?
On Jan 1st 2005 the worldwide textile market was liberalized. Since China is an enormous and enormously cheap producer of textiles, that meant an increase between 83% and 541% in imports of different textile categories into the European Union – and accompanying that a remarkable average unit price drop. What seemed a pleasure to importers, shops and customers, was severely offending the European textile manufacturers, which feared to be wiped out of the market. In the European Union, the lobbying activities of interest groups – and especially of the commercial ones – is well developed. And so is the support of member countries for their big industries, because they feel they rather have to care about their citizen’s jobs than free trade and restructuring. So the rather liberal commission set up quotas for the ten most important categories of textiles on July 12th 2005 after having consulted China in June (June 10th: Shanghai Agreement). In those categories the annual increase in imports should not exceed 8 to 12.5% between 2005 and 2007. Compared with the figures above, the gap between real free trade and restricted imports is enormous.
As it is obvious, the legal conditions for textile importers changed twice within only seven months. They ordered textiles in spring and early summer righteously believing that they were subject to free trade. Being delivered after July 12th they were not. That is the reason why such a large number of pullovers, dresses, trousers etc. found themselves kept at the customs. The European textile producing countries Italy, Spain, France, Greece and Portugal opposed the idea of not blocking products ordered before that date, which would have been legal certainty.
Summary of Chapters
1 Introduction: Provides an overview of the 2005 textile trade crisis, the conflicting interests between importers and domestic industry, and the compromise reached at the EU-China summit.
2 What has happened in detail?: Details the liberalization of the textile market, the subsequent surge in Chinese imports, and the introduction of EU quota restrictions that led to the "bra war."
3 What has led up to this situation?: Explains the historical context of the global textile trade, including the transition from the Multifibre Arrangement to WTO rules and China's accession to the WTO.
4 What is the legal and economic background?: Examines the EU's supranational trade authority, the challenges of balancing protectionist interests with free market commitments, and the role of WTO safeguard measures.
5 What does that mean for EU trade policy?: Discusses the internal contradictions in EU trade policy, emphasizing the tension between protectionist member state interests and the broader goal of reliable international trade partnerships.
Keywords
Bra war, European Union, China, textile imports, liberalization, WTO, quota, trade policy, protectionism, Multifibre Arrangement, safeguard measures, free trade, EU-China summit, import licenses, market disruption.
Frequently Asked Questions
What is the primary focus of this work?
The paper focuses on the trade conflict between the EU and China in 2005, triggered by a massive increase in Chinese textile imports following the end of global textile quotas.
What are the central themes discussed in the text?
The central themes include trade liberalization, industrial protectionism, the complexity of EU decision-making processes, and the legal frameworks governing global trade.
What is the main research question of the essay?
The essay explores the causes of the "bra war," the underlying legal and economic background, and evaluates which trade policy best serves the European Union's interests.
Which scientific methodology is applied?
The author uses a policy analysis and institutional approach, examining legal agreements, trade statistics, and the political motivations behind the EU's protectionist measures.
What topics are covered in the main body?
The main body covers the chronology of the 2005 textile crisis, the history of the Multifibre Arrangement, the specifics of China's WTO accession, and the internal struggle within the EU regarding trade competence.
Which keywords best characterize this work?
Key terms include "bra war," EU trade policy, WTO, textile quotas, protectionism, and international trade relations.
How did the EU justify the sudden imposition of quotas?
The EU acted to protect its domestic textile manufacturers, who feared being wiped out by the surge in cheap Chinese goods following the expiration of global textile quotas.
What compromise was eventually reached between the EU and China?
The summit resulted in a compromise that broadened quotas to allow blocked goods to enter the market while keeping some restrictive measures in place until the quota expiration.
Does the author consider the EU a reliable trade partner?
The author expresses skepticism, suggesting that the EU's tendency to protect special interests makes it an inconsistent partner in international trade negotiations.
What potential future issue does the author mention regarding trade with China?
The author notes that similar issues might arise with other product categories, such as footwear, which were not covered by the same textile exceptions.
- Quote paper
- Tatjana Böttger (Author), 2006, The “bra war”, Munich, GRIN Verlag, https://www.grin.com/document/132612
