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Information technology – little leapfrogging potential
World Summit on the Information Society
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US food aid remains unreformed
NGO report on German development aid
German President launches “Partnership with Africa”
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Kortmann becomes Parliamentary Secretary
ACP countries criticise EU Partnership Agreements
Africa looses out in apparel competition
Reforming EU’s sugar regulations
12/2005
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[ Textile trade ]
Asia holds its ground, Africa loses out
When the Multifibre Arrangement (MFA) expired a year ago, many experts expressed concern for the textile and clothing industries in small developing countries. Countries such as Bangladesh, Cambodia, Mauritius and Lesotho used the MFA-conform export quotas granted to them by Europe and the United States to expand their textile and garment production. It was – and still is – feared that these industries will collapse because of trade liberalisation. After all, businesses in small countries seem unable to withstand international competition (especially from China and, to a lesser extent, from India) without protection.
This fear has only partially held true, according to the findings of a recent study by the International Labour Organization (ILO). As expected, Chinese textile exports to Europe and the USA did increase significantly – by 45 or 70 % – in the first quarter of 2005. But that growth rate has declined each month since. Chinese textile exports only rose by 18.4 % in total in the first three months of 2005. That was even five points below the growth rate of the same period a year earlier. The ILO also points out that global growth of textile imports from China at the beginning of 2005 went along with a decrease in imports from Hong Kong, Macau and Taiwan. Obviously, Chinese manufacturers were shifting production from these regions back to mainland China. Nevertheless, the USA and the EU took the increasing exports from China as an opportunity to activate a clause from the protocol of accession between the People’s Republic and the World Trade Organisation and to set limits for Chinese textile imports for the next three years.
According to the ILO, small Asian exporters were far better prepared for the phase-out of quotas than expected. Bangladesh and Cambodia even managed to increase their exports. The ILO expects that more jobs will be created in the clothing sectors of both countries. Bangladesh and particularly Cambodia had prepared themselves well for the liberalisation of global textile trade – first and foremost by increasing productivity and improving working conditions in the factories. Because of fairer labour relations, especially, many importers from industrialised continue to rely on these two countries.
Africa, on the other hand, has lost out from the reform. Since October 2004, over 6,000 jobs have been cut in the textile industry in Kenya. According to the ILO, half of the once 39,000 jobs in textiles are at risk. More than ten percent of jobs have been lost in Lesotho as well, where, according to the ILO study, the textile industry accounted for 90 percent of exports. In many African countries, textile industries expanded in the past five years after the USA granted them additional preferences in the textile trade in the context of the US Africa Growth and Opportunity Act (AGOA). As stated by the ILO, AGOA textile exports in the first quarter of 2005 were 25 percent lower than in the same period of 2004. (ell)
On the internet:
ILO study:
http://www.ilo.org/public/english/dialogue/sector/techmeet/tmtc-pmfa05/tmtc-pmfa-r.pdf
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