Germany urges EU to ease China clothing limits

Germany's economy minister urged Brussels today to ease curbs on Chinese clothing imports that have blocked millions of items bought by German firms, and a retailer said it would fight the quotas in court.

New EU quotas to limit soaring clothing imports from China have already been exceeded in the case of sweaters and trousers, only weeks after they were agreed with Beijing, and retailers are worried about shipments they have already paid for but not received as the autumn-winter season gets under way.

"The restrictions on imports of textiles and clothing products from China ... threaten to cause major damage to manufacturing and trade in Germany," Wolfgang Clement said in a letter to European Union Trade Commissioner Peter Mandelson.

German fashion house Gelco said it had filed a complaint against the quotas with Germany's top constitutional court after customs authorities banned the import of shipments it had already paid for.

"We have started legal action on behalf of the whole industry," said Chief Executive Juergen Richter.

Most German fashion and sports goods firms outsource textile and clothing production to China or other Asian countries.

Volumes of Chinese clothing imports have rocketed after a long-standing quota system ended on Jan. 1, leading to an agreement between Brussels and Beijing in June for fresh limits in 10 categories of clothing and textiles until 2008.

Sweaters and trousers are already over their 2005 quotas, and three other categories -- T-shirts, women's blouses and brassieres -- are close to hitting their ceilings for the year.

Clement's letter, dated Wednesday, said the only workable solution was to allow companies to honour all old contracts even if they breached the new quotas.

Earlier this month, Germany's employment minister also wrote to the EU, urging a review of the restrictions.

EU member states have agreed to raise the ceiling for sweaters, despite concern in countries like France and Italy which have big textile industries of their own. China has yet to say whether it agrees with the proposal to bring forward some of next year's sweater quota to 2005.

EU Commissioner Mandelson hopes to strike a broader agreement with Beijing in September.

- REUTERS