Editorial
WTO meet on textile crisis
Post-MFA concerns to be addressed
With just about five months to go before the MFA is replaced by WTO open trading rules, the LDCs in the apparel business find themselves teetering at the edge of a survival struggle. As the possible impact of the loss of quotas which gave them a sheltered market share in the global garment export trade for the last 43 years, stares them in the face, they are growing anxious for some kind of intervention by the WTO. It is in this context that Mauritius gave a call, backed up by Bangladesh, for a special emergency session of the WTO with a view to highlighting the urgency of the problems faced by poorer countries. The WTO envoys didn't accede to the demand for an immediate meeting but agreed to meet sometime in October to talk on ways to ease the plight of countries likely to be most affected by withdrawal of textile import quotas. On the whole, this is a step forward.Smaller garment producers like Bangladesh with a local value addition capacity of only 20 to 21 percent to the manufacturing process seem set to lose out to China, India and Brazil which have the advantages of self-sufficiency in raw materials and longer lead-time in delivering goods. In the decades following 1984-85, Bangladesh's garment export earnings soared by 500 percent and employment increased 20 times over that bench-mark year. The country faced the first jolt through the US Trade Development Act 2002, which triggered a shift of business from Bangladesh to sub-Saharan and Caribbean countries. And, now comes the post-MFA era with its unsheltered market for the poorer countries. From the industry leaders there is a call for relaxation of EU rules of origin and greater fiscal and infrastructural support from the government. The relaxation of the rules of origin 'will not only benefit the RMG sector but the textile sector as well thus promoting the growth of the backward linkage industries.' A case is being made out by the LDCs seeking suspension of the MFA-related accord for some years to allow them a longer adjustment time. In the USA itself, manufacturers and labour unions have called upon the Bush administration to defer it to 2008. But they have been opposed by retailers who want the changes to go ahead. Meanwhile, let's brace up to meet the challenge working on the existing deadline.
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