The federal government has abandoned the domestic apparel industry in its rush to package trade concessions for Least Developed Countries (LDCs), say industry leaders.

The industry reacted strongly to Prime Minister Jean Chretien's announcement at the G-8 summit in Kananaskis that Canada will eliminate import duties and quotas on apparel imports from all LDCs, rather than limiting the benefits to Africa as the industry had recommended.

"The Prime Minister's announcement displays a shocking disregard for an industry that employs 100,000 people across Canada, and generates $7 billion in apparel sales annually, 60 per cent of them to Canadian consumers," says Bob Kirke, Canadian Apparel Federation (CAF) executive director. He estimates the government's LDC initiative will cost the industry 10,000-15,000 jobs.

The industry had recommended measures that would have allowed the government to increase market access for LDCs while minimising the impact on the domestic industry. It had argued for concessions to African LDCs only, for lower duties on imported fabrics and for greater protection against the illegal transshipment of goods via LDC countries, among other proposals.

"We had hoped for strong support from the government, which would have enabled us to compete more effectively in today's global marketplace," says CAF president Elliot Lifson.

In particular, the industry had sought reductions in the duties it pays on imported fabrics. "Opening up our market to duty-free imports of finished apparel while we continue to pay high duties on raw materials is doubly unfair. The Canadian government had the opportunity to correct this inequity by lowering these duties, but it chose not to do so," Lifson said.

Duties paid on imported textiles are a major impediment to the growth of the apparel industry, according to CAF. Canada doesn't produce the range of fabrics needed by the domestic apparel industry, and manufacturers are required to pay duties as high as 16 per cent when they import these essential raw materials.

Transshipment is another concern. The industry predicts that foreign companies will illegally ship apparel made in other countries through LDCs to take advantage of their tariff-free, quota-free access to the Canadian market. The American government maintains a well-financed and aggressive inspection system that curbs such illegal transshipments. The association says the Canadian government's proposed anti-transshipment measures are weak by comparison.

CAF is also dissatisfied with the government's limited funding for "innovation" initiatives. "We need strong government action on substantive trade issues rather than vague promises to support "innovation," says Kirke. "The fact is the Canadian apparel industry has already invested heavily in new technologies, has already developed a highly specialized and internationally recognized design capacity, and consistently delivers well-paid jobs to people across the country. But much of this can be jeopardised by reckless trade policy."

Mr Lifson promised that the industry would press the government to address these issues before the end of the year. "We continue to look to the government to create a policy framework for the apparel industry that addresses the impact of the LDC package, the long-range effects of freer trade and, especially, the elimination of all import quotas by 2005 as required by the World Trade Organization," he said.

According to Lifson, "This is an entrepreneurial industry that has historically struggled and adapted and grown. Are we to understand that owner-operated businesses no longer have a place in the Canadian economy? To casually accept the loss of thousands of Canadian jobs? I don't think so."