Textile Proactive Actions

Besides adopting protective measures, a more practical approach is to develop proactive actions.

THAILAND  Emphasis on Textile Fashion Education

The Thai Garment Manufacturers Association (TGMA) launched a two-year "Garment Industry Development Strategy". The plan includes strategies for creating a base of fashion professionals, brand development, fashion-design management, supply-chain management and production efficiency.

The association plans to set up short-term and long-term courses for fashion professionals and to regularly hold seminars on brand-building. It is anticipated  to have around 1,100 fresh fashion industry professionals over the next two years and to set up Thailand's first fashion university, in a bid to become more competitive. The university is to provide fundamental knowledge on fashion design, commercial issues and technical skills to those interested in the industry.

The officer said one option was to design the country's own fashion courses with the curriculum based on those in other fashion universities. The other was to invite foreign fashion universities to set up independent campuses here. The well-known Fashion Institute of Technology (FIT) in New York, which has branches in India and China, has shown interest in Thailand

Thai garment and textile exports this year are expected to drop by 6% on year as a result of the global economic uncertainty, rising production costs and tough competition from countries such as China and Vietnam.

In the first eight months of 2002, total exports of garments and textiles dropped 6-7% to US$5.26 billion (Bt229 billion), with garment exports alone dropping 9.5 %. 

Singapore May Complete FTA with USA

The U. S. and Singapore may sign a free trade agreement (FTA) very soon, despite several outstanding issues concerning financial services and textiles.

In terms of the textile issue, rules of origin have remained a contentious point. U. S. negotiators reflecting the concerns of domestic mills, as concerned that Singapore will become a transshipment point if strong rules of origin are enforced. There is skepticism in U. S. textile circles that Singapore will be able to control such quota-circumventing trade. In the past, Singaporean firms had been singled out for funneling shipments from Malaysia and China.

The Singaporean government, on the other hand, says that it is more than up to the challenge in that all trade shipments are subjected to checks that make transshipments virtually impossible.

The U. S. has proposed a strong yarn-forward rule of origin that is similar to the rule found in NAFTA. Singapore has yet to agree to the U. S. proposal and has remained a sticking point in the negotiations. With a small spinning industry, Singapore claims that its clothing firms will have a difficult time importing qualified yarn from appropriate sources to make up for a shortage in domestic production.

The agreement with Singapore is the first involving the U.S. Aside from its NAFTA partners, at present the U.S. only has FTAs with Israel and Jordan.

Brazil - EU Agree Textile Trade Deal

European Union and Brazil agreed a deal to free up textile trade by opening their markets for each other's textile and apparel goods on 6 November 2002.

The deal will see the EU ditch quotas on 10 apparel and textile products from Brazil, ranging from trousers and T-shirts to cotton and synthetic fabrics. Brazil will reciprocate by limiting tariffs to a maximum of 20% and refrain from applying any additional taxes on EU textile and clothing exports.

Both countries also committed themselves to dismantling all tariffs on textiles and clothing in the continuing discussions between the EU and Mercosur countries: Brazil, Paraguay, Uruguay and Argentina.

Brazil's clothing and textiles exports to the EU in 2001 were 239 million euros while EU exports to the Latin American nation were 243 million euros.

EU is ready to anticipate opening up its textile market ahead of the WTO deadline of 2005, provided its trading partners are ready to provide better access to their markets.

South Korea Unveiled New Textile Blueprint

Korea  on early November unveiled a series of initiatives as part of an ambitious industry blueprint aimed at doubling the country’s textile and apparel exports to $30 billion by 2010.

The plan, drawn up by the Ministry of Commerce, Industry and Energy, includes boosting the market share of fashion apparel exports from 5% to 10% in the next eight years.

A state-of-the-art digital dye factory where operators can manage colour control, logistics and trade online will also be set up. A huge new fashion venue also set up for companies to showcase their products. New research centres for the development of net silk and sports textiles will also be established. Cotton spinners will be encouraged to invest in new hi-tech equipment.

The blueprint hope to pull up trade surplus in the industry to $20bn from the current $11bn by 2010.

Indian Government Creates Rehabilitation Fund for Spinners

The Indian government is likely to create a special fund of USD240 million for the rehabilitation of spinning mills that are facing shortage of working capital but are still potentially viable firms.

77 mills were considered and classified into 3 groups – A, B, C based on parameters such as financial performance, labour and machine productivity levels and degree of modernization. 35% of the mills constituting group A, are profit-making mills, which do not require any financial assistance; 38% mills under group B require financial assistance. Mills incurring losses, which cannot operate viably, even with reasonable financial assistance, under group C, accounts for 27% of the mills.

According to study, a sum of USD100 million is required to rehabilitate mills falling under group B. Non-availability of such funds may lead to closure of the potentially viable mills along with production loss of 450 million kg. Of spun yarn per annum putting 150,000 workers jobless.

The study further states that a capital investment of USD1.5 billion would be required to create new capacity.

Back to Index of December 2002