Developing world loses out China has now taken control of half of the U.S. apparel market in product areas where quotas have been removed, according to figures from the U.S. Commerce Department.
At the same time as China has gained almost $8 billion of exports to the U.S. during the past four years, the developing world has lost $3 billion.
The U.S. National Council of Textile Organisations (NCTO) have used the latest trade figures to bolster their call for a separate international trade deal for textiles and apparel.
"The enormous losses by developing countries highlight the need for a textile sectoral solution to emerge out of the WTO talks next week," said a statement from NCTO. "Absent a sectoral solution, sharp reductions in tariff preferences and the disappearance of the China textile safeguard in 2009 will lead to millions of job losses around the globe."
According to NCTO, African, CAFTA (Central American Free Trade Agreement) countries, Mexican and Andean workers as well as big Asian producers such as Sri Lanka, Bangladesh, the Philippines and Thailand, wil be particularly hard hit.
Since 2001, exports of quota-free category apparel from CAFTA countries to the U.S. have fallen from $1.5 billion to $0.8 billion annually, and their market share in those categories has dropped from 9.2% to 3.5%.
In apparel categories that have been quota free since 2002, every major supplier except India and Vietnam has lost large amounts of market share in the U.S. to China. In contrast, for apparel categories where China remains under quota, its share has been limited to 8% of the U.S. market compared to a 65% share in those products where quotas were removed inn 2002.
Left unchecked, one and half million jobs would be lost in Mexico, Central America and the Andean region alone with hundreds of thousands of additional textile job losses in the United States, said NCTO.
And its not just in the U.S. market where the developing world is being squeezed out. China's share of the Japanese and Australian apparel markets is now over 75%. In the EU, in apparel categories where quotas have been removed since 2002, China's share is now 74%.
"A key question is whether the WTO will adopt a sectoral or whether it will decide to hand world textile and apparel markets over to China. By adopting a sectoral, the WTO will be sending a message that it will defend textile and apparel jobs worldwide from China's predatory pricing, currency manipulation and vast government subsidies," said Cass Johnson, president of NCTO.
Pressure for a textile sectoral is growing. Last week (w/c June 19), 14 major textile and apparel exporting countries, including the United States, insisted that textiles receive special consideration by the WTO as part of the Doha Round. At the same time, 44 U.S. congressmen sent a letter to Ambassador Schwab notifying the U.S. government that they would oppose any WTO solution that did not include an effective textile sectoral.
