GENEVA — Both the strong euro and trade barriers — from high tariffs to cumbersome customs procedures — are hindering European textile and apparel exports in key Asian and South American markets, according to a study for the European Union.
The challenges are most acute in China, India, Mexico, Brazil and Argentina, which European exporters have designated as markets with the best export potential, but where the existence of “serious market access problems” act as major impediments, the report said.
The study examined 18 countries and was compiled by Market Access Information & Analysis and the French Institute of Fashion.
Regarding the huge Chinese market, exporters said the price of EU products in light of the exchange rate with the yuan, which is pegged at 8.28 to the dollar, is the biggest hurdle in terms of loss of price competitiveness.
A major impediment in China, identified by more than 100 enterprises that took part in the survey, was poor control of intellectual property, despite the recent beefed-up enforcement efforts on trademark protection.
With the majority of Chinese customs duties for textiles and apparel still high, only upscale products are able to penetrate the market, the report said. But even in that segment, companies indicated “they are obliged to reduce their profit margins in order to be competitive” because customers who can afford them travel and are able to buy them in Hong Kong or other Asian countries at lower prices.
EU exports of fabrics to China in 2003 were valued at 144.3 million euros, or $176.25 million at Friday’s exchange rate, compared with 96.5 million euros in 1999, or $117.87 million. In the same period, EU imports of Chinese fabrics increased to 912 million euros, or $1.11 billion, up from 473.9 million euros in 1999, or $578.86 million.
Similarly, EU apparel exports to China in 2003 reached 66.1 million euros, or $80.74 million, from 41.2 million euros in 1999, or $50.34 million. EU imports of apparel shipments from China were valued in 2003 at 9.4 billion euros, or $11.48 million, up from 6.2 billion euros in 1999, or $7.58 million.
Exporters also listed India’s high import duties and nontariff barriers as restrictive factors.
In contrast, exporters from India, China and other major developing countries considered the global quota regime that ended Jan. 1 as the biggest barrier to trade in the sector. For decades, the quota system limited poor countries’ exports of textiles and apparel to rich markets such as the U.S., the EU and Canada.
The report said exporters complained that trade barriers still hamper EU exports to important markets such as the U.S., Russia, Japan, Thailand, Egypt and Pakistan.
Concerning the U.S. — the EU’s top textiles and apparel export market — exporters singled out peak tariffs, customs documentation and time-consuming security measures as being problematic.
In 2003, EU fabric exports to the U.S were valued at 790.3 million euros, down from 1 billion euros in 2000. EU exports of apparel to the U.S. also registered a contraction, with shipments in 2003 valued at 1.9 billion euros, down from 2.3 billion euros in 2000.
Russia also is viewed as a difficult market for EU exporters, the report said, with complex certification procedures identified as an area of concern.
The report identified South Korea, Canada, Australia, Taiwan, Indonesia, Malaysia and South Africa as among the nations examined with the easiest market access due to regulatory improvements.