Asia ex-China textile shipments to US, EU boom after China trade curbed- ADB
Source: Fprbets Date: 2006-09-07
Asian nations have stepped into the gap created by US and European curbs on textile imports from China, posting impressive turnarounds in their clothing exports to those markets, the Asian Development Bank (ADB) said.
The ADB said in today's update to the Asian Development Outlook it released in April that the jump in textile unit prices seen in both the US and the European Union (EU) had also boosted the value of substitute imports from Asia.
In the US market, major Asian suppliers, other than China, recorded a 'remarkable performance over the first half of this year, while in Europe, their exports 'improved dramatically' on a year earlier, it said.
In November, China agreed to limit the volume of 21 categories of clothing and textile exports to the US from 2006 to 2008, after its surge in shipments of those products to the US prompted a backlash from the US.
That agreement followed an earlier deal, covering a smaller number of products, struck with the European Union to constrain China's clothing and textile shipments.
The ADB said that China had seen the volume of its clothing and textile exports to both markets drop this year. Its shipments to the US in volume terms were down by over 40 pct on a year earlier in the first six months of 2006, while those to Europe were down 2.4 pct on a year earlier in the first four months of 2006.
However, China's market share in both markets still remains above where it was in 2004, prior to the full implementation of the World Trade Organization (WTO) Agreement on Textiles and Clothing which was meant to end global restraints on the trade.
The US and Europe saw higher unit costs for the products this year compared to last as a result of the new controls, but the price rises had different effects on the value of imports across the two markets.
'Higher prices have hit consumers in the US and have led to a reversal of the increase in imports from the world in value and volume terms,' the update said.
However, major Asian exporters other than China still managed to improve market share, with Vietnam, the Philippines and Hong Kong showing the strongest turnaround. Bangladesh, Indonesia, Cambodia and Pakistan continued to build on solid growth relative to 2005.
In Europe, unlike the US, higher unit prices helped push the value of import shipments up, according to the update. They increased by over 12 pct from China and by over 15 pct from all foreign suppliers in the first four months of 2006 compared with the same period in 2005.
Indonesia, India, Bangladesh, Cambodia, Hong Kong, Malaysia, Pakistan, Thailand, Sri Lanka and Myanmar all put in solid showings in their textile and clothing exports to the EU this year compared to last year.
The ADB noted, however, that the share of the US and Europe textile trade held by different Asian exporters could change again in the near future, depending on barriers to China's trade.
'Alternative Asian suppliers may benefit for a short time, but will face renewed competition from the People's Republic of China after the restrictions are removed at the end of 2008,' it said.
The region also needs to back more multilateral trade talks such as the WTO Doha round, instead of opting for fragmented agreements, if it wants to achieve freer trade, it added.
'A threat to the efficient development of the Asian supply chain, however, exists within the region itself and that is the proclivity of some countries to enter into bilateral free trade agreements that actively discriminate against efficient suppliers within the region,' the ADB said.
