If you think fashion is unpredictable, try world trade. 1)___ . Last year she did 60% of her $2.5 million annual sales in the United Stated, but this year is starting differently. 2)____ . «We’re low on work at the moment», she says, because the mere threat of US trade sanctions has put American buyers in wait-and-see mode.
3)___ . Officials fear the loss there of as many as 700 further jobs.
Hawick’s fate is tied, bizarrely, to bananas. Because the US believes EU trade policy unfairly favors crops from ex-colonies in the Caribbean and Africa over those owned by US firms like Chiquita and Dole, it threatens more than $500 million in «cross-sanctions» against unrelated European exports from almost 20 product categories like plastics, sweet biscuits – and cashmere.
Washington won’t introduce the 100% punitive tariffs until March at the earliest, depending on the outcome of negotiations at the World Trade Organization in Geneva. But the threat alone is enough to damage Hawick’s cashmere industry. Clan Douglas Ltd., for instance, landed a $1.65 million order from an American department store just before Christmas. That price included normal duties of $100,000, but if the sanctions kick in they will rise to almost $800,000. «Our commitment to our contract could force us into bankruptcy», says finance director Jeff Gutteridge.
There’s no American cashmere to fill the gap. Top-grade weaves come from Scotland and from Northern Italy, whose industry faces the same US sanctions; next in line is China with whom the US already has an immense trade deficit. «If this goes through,» says Gutteridge, «the Americans will be handing over our business to China and destroying the economic base of this town.»
Little wonder that the weavers of Hawick, like Belgian biscuit makers and German plastics manufacturers, hope sanctions can be avoided. But with serious issues of procedure and precedent on the line at WTO for both Washington and Brussels, negotiators were pessimistic on prospects of a compromise. In trade as in fashion, reason isn’t necessarily the highest good.
By James L Graff/Brussels
Time magazine (adapted)
Task 6. Choose the correct answer to complete the following statements about the text.
1. Belinda Robertson’s company
a) Sold more than 60% of its production last year to department stores.
b) is usually very busy during the first few months of the year.
c) Produces more than 50% of Europe’s cashmere.
2. Belinda Robertson has had to make some of her staff redundant because of
a) The competition from China.
b) The introduction of US sanctions.
c) A shortage of US orders.
3. If the EU doesn’t change its trade policy, the US will
a) Apply restrictions on the imports of fruit to America.
b) Import more cashmere from Italy.
c) Import certain goods from non-European sources instead.
4. The US
a) Exports more to China than it imports.
b) Imports more from China than it exports.
c) Imports as much as it exports to China.
5. The negotiations
a) will determine which goods are subject to sanctions.
b) are not expected to be difficult.
c) involve some complex questions.
Read the text again and answer the following questions:
What is the market situation in the fashion business?
Why are producers of cashmere clothing low on work at the moment?
What do officials fear?
Why does the US threaten cross-sanctions against European exports?
When is Washington to introduce punitive tariffs?
What do they depend on?
Why is this threat alone enough to damage the cashmere industry?
What could force the company into bankruptcy?
How can the Americans fill the gap if the sanctions go through?
What do the weavers of Hawick hope for?
Why were negotiators pessimistic on prospects of a compromise?
Summarise the story of the trade war.
Task 7.