HONG KONG'S re-export trade is expected to lose up to $3.57 billion this year due to the European Union's ruling to slap quotas on seven items made in China, the Hong Kong Exporters' Association says. Meanwhile, some manufacturers are trying to reclassify their goods out of the quota category to avoid the restrictions, according to industry sources. The hastily-imposed quotas are expected to cut back the re-export of mainland-made toys, footwear, gloves, porcelain kitchen and tableware, ceramic kitchen and tableware, glassware and radios to European countries. Association chairman Louis Wong said yesterday the figure might be even higher, given the disruption of trade in the seven items following the sudden imposition of quotas. He said that until yesterday, the EU had yet to allocate quotas to its 12-member states. As such, licences could not be granted to the importers of Chinese-made goods. Without an import licence, importers cannot take delivery of their goods, causing many shipments to pile up at storage places or kept adrift as they are not allowed to enter the importing country. ''All these disruptions to trade mean that Hong Kong's re-export trade could suffer an even higher loss,'' said Mr Wong. ''The quota restrictions affect our ability to export.'' Under the new ruling, the quotas are not transferable and have a six-month lifespan. If the quotas are not used up, importers have to return the quotas to the authorities. Mr Wong said he doubted the EU would repeal the quotas, saying: ''It would be too much of a loss of face. ''The only thing we can ask is for the EU to either double or triple the size of the quotas.'' He called on Hong Kong's manufacturers to ask their European customers to write to their respective governments to petition the European Council to remedy the situation. As the quotas are based on the import figures of 1992, which is a smaller base than last year, the cutback, in real terms, will be much higher. ''Take toys for example. The cutback is 20.6 per cent but in real terms it goes up to 22.78 per cent,'' he said. Hong Kong will be hard hit as a majority of the factories manufacturing the seven items of goods, particularly toys, are owned by Hong Kong businessmen in joint ventures with mainland partners. China, to date, had yet to make a petition to the EU over the quota issue, said Mr Wong.