While the war in Afghanistan appears to be entering its final stages, an entirely different kind of fight is just getting underway in neighbouring Pakistan, where the country's clothing and textile industry has been devastated by the economic fall-out of September 11 and the ensuing military action.
Concern over perceived delays and disruptions to production and delivery has seen orders from US buyers slump nearly 70 per cent in the past few weeks, putting around 20,000 jobs at risk as dozens of long-established textile and garment companies struggle to survive.
In a bid to reverse the slide, a coalition of Pakistani textile and clothing manufacturers, and buyers for US companies that import goods from Pakistan have formed a powerful lobbying organisation called the Pakistan Textile & Apparel Group.
Members recently carried out a survey, which they say highlights the desperate plight of the industry, and emphasises just how much the Asian nation needs the United States to suspend tariffs on textiles to encourage US companies to continue to buy goods from Pakistan.
The survey covered 40 companies in Lahore, Karachi and Faisalabad, representing about 40 per cent of the country's apparel export industry. They reported a 68 per cent decline in orders for clothing that would be manufactured from December through February 2002 compared with the same period a year ago.
In addition, the manufacturers surveyed said that 16,091 workers, or 36 per cent of their combined workforce, would probably lose their jobs. Some companies also said they would have no other option but to close factories because of the dramatic downturn in business.
"The group has urged US Congress .... to reduce or suspend existing duties on textile and apparel imports from Pakistan"
Other major textile producing countries which export to the US and world markets have also expressed concern about Pakistan receiving preferential treatment.
Bangladesh and India will be among the Asian nations hardest hit should Pakistan win such benefits, while the American textile industry is fiercely opposed to a package of measures for Pakistan following massive industry job cuts in the states.
The US is Pakistan's single largest customer, importing $2.2 billion worth of goods from Pakistan last year, with clothing and textiles accounting for $1.9bn - 86 per cent - of the total. Pakistan has only a 1.6 per cent share of the US market for apparel imports, ranking behind 19 other exporting countries, including Mexico, China, Honduras, Bangladesh, Thailand, India, El Salvador, and Sri Lanka.
Pakistan's share of the US market for all textile imports - apparel and non-apparel - is 2.65 per cent, behind 14 other countries. According to the survey, the 40 companies reported that they had orders for $30.5 million in goods for December through February, a drop of nearly $64m from a year ago. They also said they expect to produce 7.2 million "pieces" during the three-month period, a 69 per cent drop from the 23 million pieces manufactured during the same period last year.
To gain a better picture of the situation, just-style.com spoke to buyers, suppliers and industry representatives to find out how they have been affected and what can be done to give hope to the stricken industry.
We first spoke to Aleema Khan, a leading figure in the Pakistan Trade & Apparel Group, who revealed just how bleak the future is for the country's clothing and textile manufacturers.
"The result of the terrorist attacks on the US and the subsequent military action in Afghanistan has had a devastating impact on the economy," she said. "By all measures the textile and apparel industry was booming prior to September. All of our quota ceilings were filling in more rapidly than ever before.
"The textile and apparel industry accounts for about $9bn annually - 65 per cent of Pakistan's exports. Many major American buyers have all but stopped doing business with Pakistan and failed to place new orders for the upcoming spring and summer 2002 season.
"The reaction has been mixed," she added. "About 25 per cent of our US customers withdrew completely within the first week after September 11th. Another 25 per cent have continued business through worse situations in Pakistan without incident and have kept their orders unchanged.
"About half of US buyers have reduced their orders by varying degrees. The net result of all this was a staggering reduction in business by about 64 per cent in volume terms.
"There are no delays within Pakistan due to the heightened security other than a one-day delay on air shipments resulting from a shortage in air cargo space. The production of raw materials is unaffected and there is no hindrance in the ability of suppliers to meet their delivery dates."
She continued: "There are over 350 factories in Pakistan that generate apparel and textile exports. Our sample showed a drop of about 64 per cent in orders for apparel compared with last year.
"As a result, thousands and thousands of workers have lost, or will lose, their jobs in Pakistan. We project $1bn in lost revenues for 2002."
With regard to public opinion on the military action in Afghanistan. Ms Khan said most people generally backed the government's support of the US-led war on terrorism, but added that they regretted the loss of civilian lives in Afghanistan.
"We are sympathetic to the concerns of Afghanis and have been assisting about two million refugees over the last 10 years. The protestors represent a small minority of Pakistan, and their political allies have never achieved more than four per cent of the national vote," she said.
"Apart from this, life in Pakistan is as normal as it can be. The people continue to go about their daily lives and earn a living, but the lay-offs are obviously taking their toll and have created a high level of uncertainty about their future.
"Pakistan is as safe a place to be in for its citizens as it was prior to the September events. Although many foreigners left upon advice from their embassies, they are starting to come back."
Ms Khan also emphasised the fact that the vast majority of Pakistan's clothing and textile producing companies were at least 300 miles away from the border with Afghanistan so there was no danger to consignments.
"Most of the apparel and textile production centers are located in the big cities like Karachi, Lahore and Faisalabad," she explained. "Lahore and Faisalabad are over 300 miles from the closest Afghan border; while Karachi is about 1000 miles away. Our networks of roads, ports and communications have not been affected in any way.
"Pakistan has been through much more serious protests on the streets in its history, but factories have continued to operate unhindered. Any future escalation should not affect delivery performances."
She continued: "Our goal is to return to the export levels of before September. We're asking the US to immediately suspend tariffs on Pakistani goods and to raise quota limits on our products.
"Currently, US tariffs on textiles and apparel average about 17 per cent. Tariffs on the largest categories of apparel exports - men's and women's knitwear - are 21 per cent. Making Pakistani exports less expensive would encourage US buyers to resume purchasing from Pakistan
Highlighting the benefits of the her country's clothing and textile industry and referring to the American Textile Manufacturers Association's opposition to a complete lifting of textile tariffs in order to protect the US textile industry, Ms Khan said: "Pakistani manufacturers pose no serious threat to US industry as orders not placed with Pakistan will not go to the US - they will simply go to other countries instead.
"Pakistan has all the necessary ingredients to be a significant long-term supplier of value- added textile and apparel products. Raw material, infrastructure, human resource, entrepreneurship are all such ingredients.
"In addition, Pakistani industry has been serving the US market for a long time and understands the dynamics of the American marketplace. Pakistan also has the ability to produce a wide variety of products, develop innovative new fabrics and styles, and do all of this with only a short lead-time."
But despite the doom and gloom of the past few monts there has been some good news recently, with the European Commission's decision to offer Pakistan a preferential trade package giving some cause for optimism.
"The decision by the EU to provide tariff relief has helped create hope for the industry," Ms Khan said. "Pakistan was averaging about 11 per cent duties in various apparel categories and these were non-existent for many others who were bigger suppliers to the EU. Many European customers are now looking to Pakistan industry to be their supplier.
"Just suspending duties may not achieve desired results. The existing quotas will exhaust earlier and result in havoc. Tariff relief has to be coupled with selective quota enhancement in categories that are important to Pakistan, but not as important to the US industry."
She added: "Other countries do not face the possibility of annihilation of an industry they have been building for decades. Pakistan, however, faces just such a danger. We have worked hard to develop our industry to its current level and now face the possibility of sustaining irreparable damage for standing with the US in the war on terrorism."
Ms Khan also pointed the finger at the media and described certain coverage of the protests when military action began in Afghanistan as "exaggerated". "The television stations repeated the rallies and demonstrations many times during the day without bringing forward views of the moderate majority that stood by and watched the events unfold.
"But this has begun to change, however, as the media learns more about Pakistan and its population."
A spokeswoman for Federated Department Stores Inc, which has placed orders with Pakistani textile manufacturers for many years, said they were keeping a close eye on developments but had not cancelled any orders so far.
"Obviously, it is a somewhat volatile situation in that part of the world and we are monitoring it closely," spokeswoman Carol Sanger explained. "At this point however, we have not had any problems with our merchandise orders from Pakistan and, therefore, we have not made any changes in the business we do there."
Julie Hughes, vice-president of international trade at the US Association of Importers of Textiles and Apparel, said her association was not trying to win Pakistan new trade but simply protect its existing export market.
"We are not trying to shift new business to Pakistan and are not expecting a huge expansion. We are hoping to prevent the wholesale collapse of Pakistan's export market to the US and other countries."
But her views are not shared by the American Textile Manufacturers Institute (ATMI) which is resisting such moves amid claims they will only cause more textile job losses and mill closures domestically.
ATMI president, Charles Hayes, called on the Overseas Private Investment Corporation (OPIC) to provide government-paid insurance for all textile and apparel shipments from Pakistan for the next three years instead of slashing import duty rates.
"The US textile industry is already reeling from imports from Pakistan and other Asian countries at artificially low prices resulting from devalued currencies across Asia," he explained.
"Eliminating duties will depress prices still further and dramatically increase imports. Our estimates show the damage to the US textile industry could reach billions of dollars."
With the war in Afghanistan appearing as though it is about to be won by the US and its allies, it looks as if the battle for survival in Pakistan's apparel and textile industry is going to be just as bloody and fierce and may not have a happy ending.
By Richard Ewing.
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