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Italian textile clusters struggling to stay alive

The northern town of Biella used to be the home to the finest and most well known wool factories in Italy. Now many of the weaving and dyeing workshops have closed under pressure from cheap foreign competitors.

Italy is still one of Europe’s chief exporters of textiles and clothes. However its producers have been severely affected by an explosion of Chinese imports since the World Trade Organisation scrapped protective quotas on January 1.

Data from the European Commission reveals that sales of jerseys and cardigans from China to European Union members jumped 534 percent in the first quarter of this year while woven linen imports were up 257 percent and imports of men’s trousers rose 412 percent.

"The trend in the textiles and clothing sector is certainly not positive," said Paolo Zegna, head of Italy’s textiles and clothing association.

In Prato, an old textiles cluster near Florence, more than 9000 mostly small workshops are still trying to survive against the wave of Chinese products.

Their complex network of highly specialised firms, many family-owned, appears to have proven more resilient than Biella’s larger factories and home-based labour.

Many companies which are still struggling to get by have tried to distinguish themselves from Chinese competitors through high quality and original design, targeting the fashion-conscious wealthy who are willing to pay more for a "Made in Italy" tag.

"The immediate impact was not that strong because we produce for a niche in the market," said Sergio Bigaglio, head of Lanificio Lineaquattro in Prato, which sells woollen and cotton fabrics for suits and dresses.

"But, of course, we have also lost clients who now buy in China because the prices are a lot lower, everyone in Prato is worried. The future is looking quite bleak." Bigaglio said.

Under the WTO’s "safeguard" clause, the EU could ask Beijing to limit exports if they cause serious market disruption. At present the agreement between Europe and China is that China shall limit export growth of certain textile and clothing products to 10% per annum until 2008. However more probes have been launched by the EU and the United States into the increase in imports of certain textiles and clothes although they are reluctant to cause an open trade war with China.

Source: The New Zealand Herald