Blog: Leonie BarrieA rock and a hard place

Leonie Barrie | 12 June 2009

US apparel retailers and importers must feel they are caught between a rock and a hard place with a bill now heading to the Senate that plans to set up reconstruction opportunity zones (ROZs) on the Pakistan-Afghanistan border.

The idea is that certain apparel and textile items made in these zones would be imported into the US duty-free, but there are so many hurdles to overcome that four trade groups fear the measure is little more than a "hollow gesture."

Some industry veterans feel the bill lays out so many obstacles to doing business that it’s hard to see any benefits from it at all.

On the one hand the legislation doesn’t yet include items like cotton trousers and shorts and cotton knit tops – which are already among Pakistan's main exports and which the US wants to buy.

On the other, a pay-for provision in the bill will increase the cost of doing business in other areas of Pakistan by charging processing fees on imported products that have not been made in the duty free zones.

There are also concerns its more stringent labour provisions – particularly those calling for repeat inspections – may prove unworkable.

But there’s also one other fundamental problem that seems to have been overlooked.

The zones are planned in one of the most inaccessible and inhospitable areas on earth, and the idea that not only will factories actually get built here, but that US apparel importers and buyers will be willing to put their lives on the line to carry out factory inspections, is perhaps pushing the realms of reality.



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