Bra wars, textile quotas and fraud

Gavin McFarlane of Temple Chambers Cardiff

The litany of tragedies this summer was, to a limited extent, alleviated by the absurdities of the so-called ‘bra wars’, a spat between the European Union and China over the admission of cheap textile products to the EU. Some years ago member states were notified that the Multi Fibre Agreement (MFA), which protected their textile industries, would end on 1 January this year, from which time all restrictions on textile imports were supposed to be lifted. EU trade commissioner Peter Mandelson was enthusiastic, despite warnings that in a short time China was likely to capture up to 50% of the world trade in textiles and that vulnerable industries in smaller countries such as Sri Lanka and Lesotho would be destroyed. European retailers pre-ordered huge quantities ahead of the demise of MFA but after loud complaints from EU producers the Commission impounded a large proportion of the imports, prompting a furious Chinese response. When China threatened to lodge a formal complaint with the World Trade Organisation (WTO), Mandelson was forced to scramble betweenBrussels and Beijing to patch up an interim agreement. The blocked goods were finally released under an arrangement that offsets the imports against quotas in coming years.