The EU clothing market in 2008 – opening the floodgates?

Abstract

PurposeThe purpose of this paper is to briefly review the trends on clothing imports into the EU in 2008, the year when quantitative restrictions on all EU clothing imports lapsed.Design/methodology/approachThe paper looks at trade figures as reported by Eurostat and, in particular changes between 2004‐2008, the period during which clothing trade was liberalised.FindingsThe paper finds that clothing imports from China increased in 2008 as predicted by many actors. However the extent of this increase was less than might have been expected from the impact of earlier liberalisations. Several explanations are suggested for this observation. More broadly, the liberalisation of the EU clothing market seems to have had rather negative impacts on clothing suppliers in the EU neighbourhood, while amongst developing country suppliers the impacts have been rather varied, with Bangladesh and India showing quite strong performance while other, often smaller, suppliers have seen rather negative trends. The impact on the Asian tigers has been universally negative, with large falls in exports, especially in Hong Kong and Macao.Practical implicationsThe year 2008 was the first for decades that EU clothing imports were unrestricted by quotas. These trade figures therefore give us a good indication of the true situation in relation to competitive advantage within a sector in which trade has long been distorted by policy.Originality/valueThe trade figures for 2008 have only just become available, therefore this is the first chance to look at trade flows into the EU in an unrestricted context.