New system to replace quota limits for textile

China's clothing exports to the European Union may rebound in 2007. Shipments already surged by the end of 2006 with EU's quota fill rates finally reaching 80%-90% in most categories. Licences are being rapidly used in China in the first days of 2007, in addition, with quota prices reaching higher levels.

Nevertheless, adhesion of Rumania and Bulgaria to the European Union should be followed by a rise in EU's quotas.

After EU's textile and clothing imports had been placed under limits in 2006, shipments began accessing EU's borders at a very low level. Such a decrease in EU's imports from China reflected a fall in orders that were placed in the second part of 2005 after embargoes were imposed by Brussels.

With quota fill rates remaining at low levels in the first months of 2006, however, fear of new embargoes disappeared and much larger orders were received by Chinese exporters. As a result, EU's imports began sharply rising by the end of last year and may further increase in the first months of 2007.

Quota fill rates finally exceeded 80% by the end of 2006 in no less than six categories, including pullovers, women/girls shirts, or women/girls dresses. Statistics covering the use of licences in China confirm that EU's quotas were nearly filled by the end of the year in categories pullovers, trousers), W/G shirts and flax yarns.