The European Commission has decided not to extend quotas on EU textile and clothing imports from China after December 31, 2007.

Because of this Smaller Textile and Clothing Suppliers are under threat as EU quotas on imports from China come to an end to their offering.

It was expected that the quotas may be extended for one more year under the special textile safeguard clause 1.  Such an extension would have ended the quotas at the same time as those restricting imports into the USA.

The Commission has rejected requests by the European textile and clothing industry for a one-year extension. The industry now fears that the removal of quotas could spark off a return to the surge in EU imports from China witnessed in 2005, which led to the introduction of the quotas.

Faced with restrictions from US for its imports, China will focus its efforts on the EU market if the quotas are lifted. 

The surge in 2005 was caused largely by the fact that EU imports from China were freed at the end of 2004 from long-established quotas. These had restricted Chinese supplies since the 1980s - first under the Multi-Fibre Arrangement (MFA) and more recently under the Agreement on Textiles and Clothing (ATC).

The small textile and clothing suppliers believe that the EU move means end of business for them.