Free Business Dissertations - Is It Fair And In The Interests Of Free Trade And Competition For The Eu To
Is it fair and in the interests of free trade and competition for the EU to impose quotas on the Chinese textile industry or is the EU guilty of protectionism.
Background:
This title has particular interest in today’s environment as it is a contemporary issue which is still very much at the forefront of political discussion. It deals with the very real threat that developing countries face and how much their livelihoods are influenced by the decisions our governments make. This question will be researched focusing on the questions below as a general outline of how the discussion will progress and giving the discussion a basic structure, which will be supported with evidence gained from UK wholesalers and manufacturers who import from China in order to gain a first hand view of how the current situation is actually effecting those involved in it. These interviews will stand as primary research whilst textual evidence will back it up.
Will banning Chinese exports solve the problems facing the European manufacturers?
Whilst banning Chinese exports may not solve all the problems facing the European manufacturers, it could certainly aid the situation which has this year seen Asian and Indian exports rise, with only European jobs suffering due to the ending of old quotas imposed by the government. The industry currently employs 40 million people worldwide, and is worth £200.1bn so there is a lot to lose for anyone who is on a downward spiral in the industry. Sanctions against China imposed by the EU may have had an effect because the initial boom in Asia slowed after 3 months, however, the EU textile industry is still far behind that of China, and the simple fact is that if products are disallowed from China and Asia, then they will have to brought closer to home. Consumers are wary of buying EU textile due to their elevated prices, however, a quota on the Chinese exports would mean that the suppliers closer to home would have to be given the business. It forms a symbiotic relationship because after EU suppliers have gained more business, they will be able to lower prices, making the consumer happier.
Has the quota system benefited the EU consumer?
As a general rule, the quota system will benefit the EU consumer in the long run. Research shows that most people want to support their own economies if possible, but people are clearly going to buy what is cheapest and therefore best for their business. The quota system means that cheap Asian textiles are harder to come buy and so the consumer is forced into buying from and EU supplier, who has higher prices. The longer this goes on, the more the prices will lower to fall into line with the Asian market - as business for a supplier increases, they are able to lower the prices of their textiles and still cover all costs.
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