Leading article: End of the bra wars, but the pain is only postponed

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The Independent Online

This crisis could, and should, have been foreseen. And responsibility for the debacle inevitably falls upon the shoulders of the EU trade commissioner, Peter Mandelson. It was no secret that the global textile quotas were due to come to an end in 2005. And it was well known, too, that Chinese firms were increasing their garment production in anticipation of entering this market - indeed, many European retailers had placed large orders with Chinese manufacturers with this opportunity in mind. So when the EU suddenly imposed new quotas in June to protect domestic garment manufacturers, it was predictable that both retailers and producers would rush to get under the wire before the quotas were filled. The result was the log jam of jumpers, T-shirts and bras we have been reading about.

No one should assume that yesterday's deal, which was concluded after some gentle nudging from Tony Blair on a trip to Beijing, is a long-term solution to the global trade imbalances between Europe and China. The new trade restrictions only buy time for Europe's textile manufacturers. It will not make them more competitive nor guarantee their long-term survival. And this deal is bound to harm the European retail sector next year, when the quotas will now be doubly restrictive. It is simply pain postponed.

The best interests of European economies would be served if the EU began to dismantle trade quotas entirely. China clearly has the capacity and the inclination to manufacture almost all the garments demanded by European shoppers. It should be allowed to do so. One might as well have attempted to prevent Britain specialising in shipbuilding, or the prairies of the American mid-west being opened up for farming in the 19th century. If a country can perform an economic function more efficiently than the rest of the world, it is senseless to try to stop it. This is especially true in today's global economy where the consumer is so powerful. The only viable option for European economies is to concentrate on where they can perform better than others. It is increasingly clear that this does not include making T-shirts.

China is rapidly becoming the new workshop of the world. It is the biggest manufacturer of televisions. A Chinese firm owns IBM's personal computer business. This undoubtedly raises serious issues. China, in its headlong expansion, must not be allowed to disregard the rules of world trade. The predatory targeting of markets supplied by other developing countries must cease. Chinese state banks should not be providing cheap finance for favoured companies. And Western states must not turn a blind eye to China's shameful repression of its own people for the sake of good economic relations with Beijing.

But globalisation and the emergence of China is a process that also brings great benefits. In the West, it is depressing consumer prices and keeping a lid on inflation. It is also providing a myriad of new business opportunities - as witnessed by another deal yesterday for Europe to sell 1,800 Airbus aircraft to China over the next 20 years. And it should not be forgotten that in China itself, economic growth is lifting millions out of poverty. The bra wars are a distraction from this bigger picture. Narrow protectionism in the face of the rise of China is unsustainable as well as wrong.

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