In a commentary in the International Herald Tribune, Hafiz Pasha, UN assistant secretary-general, and director of UNDP regional bureau for Asia and Pacific, writes that there will be winners and losers in Asia when the impact of one of the biggest revolutions in the garment industry – elimination of a 30-year-old trade quota system on textiles and clothing – kicks into gear on Jan. 1.
In the midst of the hand-wringing about which countries will gain the most and which ones will be left furthest behind, there is one certainty: Impoverished women in the poorest countries could be most adversely affected.
But there is still time to put measures in place to cushion the likely impact on the most vulnerable people – including the majority of garment workers who are women, says Pasha.
The new year will be pivotal for the smaller Asian countries that benefited from quota restrictions on apparel exports from their larger neighbors. As all remaining quotas are eliminated, the shifting trade flows will hit women workers of companies that are no longer able to compete.
The United Nations Development Program will publish a paper in January that will offer specific policy options, at national and international levels, to mitigate the adverse impact of the quota shift.
For a start, domestic labor restructuring programs could include job banks and mass training in alternative skills. Employment priority should be given to the displaced workers, especially women. For those who are able to keep their jobs, the promotion of decent work throughout the textile and garment industry can be enforced through labor laws that guarantee full respect for workers rights.
Competitiveness should not mean lowering wages or increasing working hours, but should instead translate into improved labor productivity. This requires upgrading skills to make them more compatible with the needs of buyers in international markets.
Long-standing commitments to provide duty-free market access for all least developed country exports must be honored. It is not too late for action. The textile quota arrangement helped to lift millions out of poverty, especially women in the developing world. It offered hope and opportunity, as well as jobs. It would be a cruel irony to ignore their plight now.
With decades-old quotas limiting textile exports from China and other countries set to lapse on Jan. 1, the World Trade Organization expects that within three years, China’s share of the worlds textile and clothing market will rocket past 50 percent from 17 percent in 2003.
Even with quotas limiting shipments to WTO-member countries in place, Chinas clothing exports are rising fast. In the first nine months of this year, China exported 4,5 billion US dollar in apparel and accessories, up 19 percent from the same period last year.
In Korea, unlike earlier forecasts, experts say that the quota eliminiation is unlikely to result in a sudden crash of the industry. – The United States and European firms will be harder hit, while Korea is in a better situation, as its textiles and apparel industry is still intact and is still capable of competing in a niche market with high-end goods, said Yun Soo-young, director of the Commerce Ministry’ textiles and apparel division.
The New York Times meanwhile reports that the death knell for Mongolias garment industry will ring on Jan. 1, when a decades-old global quota system is to end.
Mongolia is an example of a small, isolated country where the new competitive order is expected to be particularly harsh. Orders are drying up for the factories that sprang up here over the last five years in the industrial suburb of Khan-Uul, on the main thoroughfare to the airport.
At risk are 40.000 jobs. With textiles and garments ranking as Mongolias No.2 export item after minerals, the industry is believed to account for about 10 percent of steady jobs in Ulan Bator, the capital and largest city.
The Wall Street Journal Europe reports that he countries that emerge as winners will be the ones that focus on sharpening – or even redefining – their comparative advantages to adjust to the new global reality. And the process could dramatically alter the landscape of those developing countries that were once shielded from global competition.
Competing in the global marketplace requires investment in infrastructure, cost reduction, cracking down on corruption and cutting down red tape. A free market in clothing will bring down prices for consumers and give more workers in the developing world a chance to at last depart poverty and join the middle class.
Kilde: www.worldbank.org
