Prefiguring a post-quota world, China’ share of Norway’s apparel imports progressively reached 45% after the Nordic country removed all textile limits by the end of the past decade. Other low-cost suppliers were not able resisting the surge in imports from China, as a result, while clothing prices dramatically fell at retail.
Ahead of 2005’s elimination of textile quotas, Norway was the first importing country in fully implementing the Agreement on Textiles and Clothing (ATC), concluded in Marrakech by the end of 1995.
In sharp contrast with EU’s and US’s delays in removing quotas on most sensitive categories, Oslo decided rapidly eliminating all textile limits.
The liberalization process was completed by 1998 with the full removal of remaining quotas on apparel imports.
Impact of quotas’ removal
Five years later, Norway offers a clear picture of a post-quota market with China’s shares having progressively risen to 45% of total apparel imports, in volume terms, according to data compiled from state body “Statistics Norway”.
In volume terms (tons), China’s share continued increasing in the first quarter this year from 44.38% to 45.46% of total Norwegian apparel imports.
In value terms (kronen), China only has 29.27% of the Norwegian market but its share continues rising.
With the removal in quotas, China’s exporters were able imposing their lower prices, compared with major competitors.
Bangladesh is the only one in selling at lower prices, as indicated by our index of averaged import prices (see our table below).
Turkish prices are 83% above the China’s level while India’s prices are 54% higher.
When Hong Kong’s prices increased by 21% in the past year, China’s prices were up only 7.98%. Import prices soared in the past year as a result of the weakness in the Norwegian currency.
Before removing all quotas, Norway had strongly protected its textile and apparel industries for decades.
Oslo even left the MFA agreements in the seventies in order to impose unilateral quotas, before finally rejoining the MFA in 1984 and signing the Marrakech agreement in 1995.
After imposing very high duties, Norway also began cutting its import duties from the end of the past decade.
Imports from other EFTA countries were already free of any duty since the sixties. Norway had also concluded a free trade agreement with the European Union, effective from 1984.
The Norwegian parliament decided in 1993 to progressively lower tariffs on apparel imports from about 20% down to 12% in 2004.
Preferential treatment was also offered to so-called GSP countries, eligible under Norway’s Generalised System of Preferences (GSP).
Although major textile and apparel products, such as childrenswear, underwear or articles for men may not be imported under GSP treatment, a substantial cut in tariffs is offered for other items.
Duties were also fully eliminated on imports from poorest countries such as Bangladesh.
As a result of quotas’ removal and of a fall in tariffs, import prices dramatically fell in the past ten years.
According to a recent study by Norway’s Central Bank, clothing prices were down 15% between 1995 and 2002, maintaining the overall price index at very low levels.