ISLAMABAD, Nov 28: Pakistan’s textile export to European Union (EU) dropped by 16.3 per cent in the first eight months of the current calendar year mainly due to the capture of EU textile market by Chinese products. The European Union’s latest figures reveal that not only Pakistan but the textile export of a number of other developing countries also suffered a major setback as a result of about 40 per cent increase in Chinese export to EU market.

Textile export from other Asian countries included South Korea, Thailand and Bangladesh also saw significant reduction, by 28.6 per cent, 15.1 per cent and 9.3 per cent respectively.

The unprecedented boom in the Chinese export to EU is simply at the expense of Asian and African clothing exporters. This upward swing is likely to continue keeping in view the availability of cheap labour in China and the price compatibility of its products.

After the worldwide removal of textile quotas since January this year, the developing countries have turned out to be the main losers.

Textile exporting countries have been struggling to keep up with China’s large and modern clothing production facilities in a liberalized trading environment.

Burma and the Philippines were the worst losers with their export down respectively by 54.4 per cent and 41.4 per cent in value terms.

EU’s imports from the group of African, Caribbean and Pacific (ACP) nations essentially poor former European colonies, which were given preferential trade treatment by the EU, dropped by 24 per cent in value and 28.1 per cent in volume.

The figures have also proven wrong the apprehension of some European textiles companies which forecast the EU market would be flooded by cheap clothing from China and other countries after the abolition of quotas on 35 key products.

Instead, the EU’s overall textile imports rose by only 2.1 per cent in value and 2 per cent in volume.

The figures show China’s boom in clothing exports, with EU imports from the country increasing 43.9 per cent by value and 39.9 per cent by volume in the first eight months.

This influx of Chinese clothing led to serious trade tensions between Beijing and both Brussels and Washington earlier this year. Although Peter Mandelson, the EU trade commissioner, eventually negotiated a truce with China in June, however, more problems emerged later when European retailers faced a supply crisis, with shipments of Chinese textile blocked at customs at a time when autumn and winter retail trading season was around the corner.

The figures show that some nations have been quicker to respond to the quota-free environment and restructure their textile sectors. The performance of Bangladesh, which has at least avoided a double-digit fall in EU imports, was evidence of price-cutting and rationalization. But, it seems that Pakistan had done no homework in this regard.

To justify its decision to re-introduce temporary safeguards on Chinese imports, Brussels has been probing both the clothing trade flow from China and its impact on the EU.