Textiles: India, China, Bangladesh `benefit in post-quota regime'

New Delhi: In the second year after the phase-out of the Agreement on Textiles and Clothing (ATC), China, India and Bangladesh exporters performed well benefiting millions of low-income textile workers, the World Trade Organisation has said.

In its preliminary assessment of global trade released in Geneva today, WTO said while China has enhanced its role as the leading supplier, low and lower-middle income countries have seen their share of world exports of textiles and clothing (T&C) increase markedly.

Pointing out that the structural changes in world trade of T&C continued unabatedly, WTO noted that exporters from developed countries and those from advanced developing economies in East Asia are losing market share, together with major developing suppliers in Central America and the Mediterranean region, which process textiles originating from developed countries.

It said the annual expansion rate of T&C imports from China into Canada, the US and the EU was roughly halved between 2005 and 2006 in each of these three markets. The combined textiles imports of the three economies from China rose by 41 per cent in 2005 and is estimated to have increased by 15 per cent in 2006.

Stating that despite the sharp deceleration this rate is still about twice the rate of imports from all sources, WTO said these import developments suggest that the introduction of quotas in the US and the EU in the course of 2005 had a restrictive impact on textile imports from China.

Imports of T&C of the four major developed markets (including Japan) are estimated to have increased by 5.5 per cent to about $350 billion in 2006. This increase was slightly faster than in the preceding year despite the deceleration in US import growth to less than 4 per cent.

While import from China to the US increased by 15 per cent and accounted for nearly 30 per cent of total US imports of T&C, the rise in imports from Indonesia, Vietnam, Bangladesh and Cambodia exceeded that from China.

Imports from India, a major supplier to the US, rose 12 per cent in 2006 which was less than the rate recorded by China.

Same scenario in EU


The reshuffling of EU import shares had similarities with those of the US market. Some of the major traditional suppliers such as Turkey, Romania, Morocco and Tunisia lost market shares while Asian developing countries increased their share. As in the US market, China expanded its role as leading supplier, but imports from smaller Asian suppliers tended to rise faster than those from China. Rather untypical is the sharp rise of EU clothing imports from Hong Kong, China in 2006.

Among the developed markets Japan's textiles and clothing imports are the most focussed on China due both to geographic proximity and the absence of import quotas in the recent past. India's exports to the 25-country EU are 13 per cent and to Japan 12 per cent on annualised basis for the first eleven months of 2006 calendar year.