EU clothing imports fell in value by 0.2% in the first seven months of 2008 compared with the corresponding period a year earlier, according to a report by Textiles Intelligence.

This represented a major reversal compared with the first seven months of 2007, when imports were up by 5.6% in value and by 8.5% in volume. The main cause of the deterioration during January-July 2008 was a dampening in demand for clothing in the EU as a result of the global financial crisis.

China continued to be the EU’s largest clothing supplier during January-July 2008 although growth in imports from the country slowed during the seven-month period. That said, with growth of 6.7% in value and 11.2% in volume, China did better than all sources combined and, as a result, China increased its share of the market to 38.6% in value and to 45.2% in volume.

The main impetus for China’s strong performance in the first seven months of 2008 was the elimination at the end of 2007 of safeguard quotas, which had previously been in place on EU imports of certain Chinese clothing products. Not surprisingly, imports of these products grew at double digit and triple digit growth rates—at least in volume terms—as prices were slashed.

At the same time, some suppliers struggled to maintain orders. Imports from Hong Kong, for example, suffered double digit falls in value and volume as outward processing arrangements (OPAs) with Chinese exporters lost their relevance—at least in terms of sales in the EU market. The industry in Vietnam was also severely affected, as clothing imports from the country plunged in volume terms by 37%.

Elsewhere, imports from Turkey, Tunisia, Morocco and Indonesia all fell in the first seven months of 2008, while those from Bangladesh and India increased only modestly.

In terms of trade policy, the governments of the EU’s ten largest clothing suppliers were active in 2008. In China, for example, the authorities increased the rebate on textile and clothing exports three times, while the Turkish government unveiled its “Strategic Action Plan for Textile, Read-to-Wear and Leather Sectors”.