Poorer south-east Asian countries devastated by this week’s floods face a new shock for their fragile economies today when all quotas on textile imports are lifted by World Trade Organisation (WTO) countries, including the EU.
China and India are likely to be the main beneficiaries of ending the 40-year-old quotas but Bangladesh and Sri Lanka are among those likely to be left behind by their richer, more powerful neighbours.
This week China, which already supplies a fifth of the world’s clothes and about 13.5% of a global textiles market worth $360bn (£190bn), responded to concern that it would extend its dominance by announcing limited, very low duties on six categories of clothing, including pyjamas, blouses, skirts and overcoats, in an effort to manage trade.
But the WTO has signalled that China’s share of the EU’s clothing market will rise from 18 to 30% and that of the US from 16 to 50%. It has 180 million textile workers. India’s share of the EU market islikely to rise from 6% to 9% and its global exports, from a workforce of 35 million, should hit $50bn by 2010 from $11bn now.
Poorer competitors such as Sri Lanka, which gets 71% of export revenues from textiles, and Bangladesh (80%) fear China (12%) will squeeze them out by offering higher quality, cheaper goods to the west.
· A US judge has temporarily blocked the Commerce Department from putting emergency restrictions on Chinese imports, a move that backs clothing retailers and opposes the wishes of textile producers.