Fears of Chinese dominance rattle textile industry

Removal of quotas could undermine benefits of Agoa JOY ORLEK THE IMPACT of the imminent lifting of textile and apparel quotas in developed countries like the US and European Union early next year took centre stage at the recent Agoa (Africa Growth and Opportunity Act) conference held in Johannesburg. Organised by the apparel and textile manufacturers and exporters of sub- Saharan Africa, the conference focused strongly on the threat from China which, as a member of the World Trade Organisation, gains quota-free access to the USA next year. It’s a move that could severely compromise South Africa’s export efforts under Agoa. China is currently the number one exporter of textiles and apparel to the US and is expected to maintain its ‘supplier of choice’ status because of its ability to make any product at any quality level and at a competitive price, Mauritian minister of foreign affairs and international trade, Jayen Cuttaree, told conference delegates. That the end of the quota system and China’s strength could undermine the benefits of Agoa, was a consistently articulated concern. And developing countries were not the only ones bleating. Cass Johnson, president of the American Textile Manufacturers Institute (ATMI), quoted a recent Business Week article that examined the impact of the removal of quotas. The study revealed that 30 million jobs would be lost to China, and 650 000 of those would be jobs lost in the US manufacturing industry. The ATMI has lobbied industry in various countries - including Africa - to sign a US-led petition advocating the extension of the deadline for the termination of quota limits to 2008. According to media reports some 14 sub-Saharan countries have signed the declaration aimed at “preventing China from taking over the market.” South African Textile Federation chief Brian Brink points out that once quotas have been terminated, the textile and apparel industry would rely on duties to regulate the trade. Concern has been expressed that antidumping action will increase once quotas are outlawed as a protectionist measure.