Quota-free environment shuts six Lesotho factories

JOY ORLEK THE APPARENT closure of up to six apparel manufacturers in Lesotho has sounded a loud warning that the post-quota trade environment in line with the WTO’s Agreement on Textiles and Clothing has arrived. According to the Trade Law Centre for Southern Africa, various studies have predicted producers in sub-Saharan Africa to be among those most negatively affected by this, although Agoa’s preferential market access provisions are seen as an important mitigating factor in the short term. In a detailed paper on the implications of the removal of quotas, tralac associate Eckart Naumann notes that the impact on southern African countries is likely to be varied. “A higher degree of reliance on exports to major world markets means that countries are potentially more exposed to the negative impacts of quota removal. For example, while South Africa exports only about one third of its textile and garment production, Lesotho ships virtually all its output to the US.” Lesotho’s apparel exports continued to grow during 2004, even when measured in volume rather than by US dollar-value, according to tralac.