QATAR: Trade Body Questions Industry Future After Doha
The situation was made even more critical, he said, by the current world recession which was already hitting the two industries hard, and by new attempts at Doha to speed-up the quota elimination process.
Mr Kearney said that textiles and clothing exports in 2000 represented nearly 8 per cent of world trade in manufactures, and was a vital source of income for some of the least developed countries. In the past the industries had always been the engine for driving countries up the development ladder. By the end of 2001 the major importers - the USA, the European Union and Canada - will have integrated over 51 per cent of their textiles and clothing imports into normal WTO rules and their imports have been continuously increasing.
"The lesser developed countries", he said, "stand to gain considerably from the gradual dismantling of quotas, a process which should have given them the time to adjust to open competition in world markets. Now China's accession to the WTO, coupled with a surprise new push by China and a few other advanced developing country exporters to accelerate the dismantlement of the quotas' process, threatens to destabilise markets, create insecurity and endanger the prospects of the lesser developing countries retaining a viable textiles and clothing industry when quotas disappear.
"This would be disastrous for countries heavily dependent on textiles and clothing exports and which have not adequately planned the transition to a world without quotas".
"In reality", said Mr Kearney, "the Multi-Fibre Arrangement, which started out as a mechanism to protect the industry in the industrialised world, became a powerful stimulus for its introduction to poorer countries like Bangladesh and Sri Lanka and for their building a significant share of world markets for their production.
"Now", he said, "Bangladesh faces the loss of perhaps one million jobs in the next couple of years, Indonesia, a similar number, Sri Lanka, tens of thousands. Lesotho, Peru and many other lesser developed countries which have not planned for transition and diversified into other industries will likely also face serious job losses with the potential for considerable local social unrest.
"The only beneficiaries will be China and a handful of other major suppliers to the US and European markets. It is perhaps not surprising then that it is this group of well-off exporting countries which is now pressing for a much more rapid dismantling of the textiles and clothing quota system. So much for solidarity among developing countries! As elsewhere, at the first opportunity the better off will turn tail and take advantage of their weaker neighbours.
"Today, many of the least developed countries are encountering problems in fulfilling their existing quotas, often being undercut by their more powerful competitors, particularly China. Changing the quota phase-out system now would deal these lesser developed countries a body blow from which they would never recover".
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