GRTU to make conditional release proposal

A number of traders are partly at fault for the blockage at Customs of clothing imported from China because they failed to take the necessary precautions to apply for licences at the right time, the Malta Chamber of Small and Medium Enterprises, GRTU, said.

"We were told with certainty during the Meusac (Malta-EU Steering and Action Committee) negotiations that our quotas were high enough to cover present and future needs. If all traders had applied for their quota, then none would have found themselves in the situation where products are being impounded by Customs because they do not have the relevant import licences," GRTU director general Vince Farrugia said.

"Over all, we should not be panicking because we have sufficient quotas," he said, adding, however, that "what we need to look out for are those who may abuse of the quota allotted to Malta for re-export. In that case, the EU Commission would attack us."

About 75 million Chinese textile items are sitting in warehouses and ports around Europe, waiting to be allowed in. They represent orders that are not allowed into Europe because China has exceeded the new annual limits on imports of certain goods that were agreed to in June.

The GRTU said it would be proposing to the government that the goods that have arrived in Malta but lack an import licence, would be allowed in on the proviso that they would be deducted from next year's quota entitlement, Mr Farrugia said.

"This would offer two advantages: no trader would have to send back his goods plus it would give a chance to renegotiate better quotas for next year, unless the EU Commission resolves the matter by then."

The global textile industry has been in flux since the beginning of the year after quotas, which had limited worldwide clothing sales for 30 years, were removed. The move resulted in a huge increase in the exports of Chinese clothing.

As part of the rules governing China's entry into the World Trade Organisation, however, Europe has temporarily won the right to place limits on textile imports in order to give European manufacturers time to adapt to the new trading environment.

The first effect of this issue would be a surge in the rate of inflation, which is to the detriment of all, Mr Farrugia argued.

The price index is influenced by a number of factors but one of the strongest is clothing, he explained, adding that the volume coming from China was growing and was one factor that prevented the inflation from rising at a more rapid rate.

One good service importers, of which the GRTU represented a vast array, were offering the Maltese community was lower prices on products. Prices had been maintained primarily because of the switch to Chinese produced goods, which were really the products of European companies operating in China.

Mr Farrugia stressed that "many traders have not yet woken up to the fact that we are part of an internal market and that the rules that apply to it apply to us too".

Traders should be more aware, through their active participation in GRTU meetings, of what is happening within the EU, he advised.

"They must not only abide by our regulations but also those of the EU. This is the new game," Mr Farrugia insisted.