ACTION AGAINST US SUBSIDIES

Cotton growers of Australia are expecting that action under (WTO) World Trade Organisation against US subsidies will create a level playing field. The government has agreed to Australia joining as a third party to WTO action by Brazil. Christine Campbell from the Cotton Industry Council says, Australia is one of a number of very efficient world cotton producers. She says however, US subsidies allow growers to compete unfairly against Australian cotton exporters.
Ms. Campbell says it has been estimated the subsidies cost the local export industry as much as $A177 million a year. If they are removed, then the US farmer has to look very hard at his economics of production.
CRACKDOWN -A WIN FOR QUALITY-FOCUSED GROWERS
Wool producers of Australia who manage their wool clip to exclude dark fibre contamination will be the big winners from the industry's new effort to crack down on wool-contaminants. According to Peter Morgan, Executive Director of the Federation of Australian Wool Organisations, the new scheme would give specialist wool producers the opportunity to showcase their commitment to producing a quality, contaminant free wool clip.
The scheme is designed to protect the high reputation of the white Australian Merino clip and as a consequence, the price premium that it receives over wool from South America and South Africa will be maintained.

COTTON PRODUCTION POLICY

Eight member nations of a West African Economic Community have announced they have agreed on a programme to boost the competitiveness of the cotton-textile sector. Finance ministers from the West African Economic and Monetary Union (UEMAO) agreed on the scheme at a meeting in Togo, where they also considered the grouping's economic state.
They decided to set up a regional fund for cotton production and promotion and for investment in textiles. The programme also features a regional training programme in the textile trade industries and the establishment of technical centres, with the aim of helping to lift the cotton industry out of the crisis it has known for several years.

IMPROVING INVESTMENT CLIMATE IN GARMENT SECTOR

World Bank in its latest study had warned that with the withdrawal of multi-fibre arrangement (MFA) the ready-made garment sector would lose competitiveness with China after 2004, unless Bangladesh addresses deficiencies in its investment climate
In a study on improving the investment climate in Bangladesh, the World Bank has pointed out some major issues, which it says are responsible for the loss of Bangladesh's competitiveness against China in global market. The study says that a typical Chinese garment factory uses much more capital per worker and pays higher wages than its Bangladesh counterpart.
The study finds that Bangladeshi factories spend $1,000 as average annual wages only as against $2,000 in Chinese factories. It says that the Chinese factories have far higher labour productivity than the Bangladeshi ones. Even after the higher wages and greater amount of capital spending, a typical Chinese factory is much more profitable. The study observes that Chinese factories are much more efficient in respect of average productivity, capital intensity and wages because they could count on more reliable power supply, easier access to phone lines and other infrastructure, and also more efficient ports and customs.
The World Bank study points out that Bangladesh is one of the pioneers in the world in taking the advantage of its high quality, but low-cost labour force. And, it has shown willingness to make changes to meet compliance, norms and standards set by buyers in the United States and Europe. Bangladesh is the first developing country to sign an agreement to eliminate child labour from the ready-made garment factories. The study further says that the looming end of the MFA makes it even more imperative for Bangladesh to address deficiencies in its investment climate.

CHINA INVESTS US$ 5.12 MILLION IN TEXTILE MILLS

China is to invest US$ 5.12 million in textile mills in the Dhaka Export Processing Zone. The enterprise, to be known as Queen South Textile Mills Ltd, will be a totally foreign-owned company.
Joint Secretary and Member (Investment Promotion) of BEPZA M Nazrul Islam and Chief Executive Officer of Queen South Textile Mills Jamie Wong signed the agreement on behalf of their respective sides.
Queen South Textile Mills, which will employ about 2450 Bangladesh nationals, will annually produce 10 million pounds of yarn and 3 million pieces of knitted garments.
It may be mentioned that China is the third highest investor in the EPZs of Bangladesh with 22 industries having an investment of US$ 96.52 million. Meanwhile, Bangladesh and Japan will invest US$ 479,000 in a machine-parts factory to be set up in the Chittagong Export Processing Zone.

FREE TRADE AGREEMENT WITH THE US

Already enjoying a surge in exports to the United States, Colombia's apparel industry warmly welcomed the announcement of a future free trade agreement. Investment in textile and apparel facilities could be further boosted, allowing competing with China and Central American countries.
Colombia's apparel exports to the United States fell in 2002 after competitors from Central America were granted a duty-free entry into the United States. They clearly rebounded in 2003 after Colombia and other Andean countries (Peru, Ecuador, Bolivia) were offered a similar treatment.
With Washington currently negotiating a free trade agreement with five Central American countries, Bogota could fear a new setback on the US market.Colombian apparel exporters already take advantage of a US duty-free entry under a preferential treatment, known as Andean Trade Preference and Drug Eradication Act (ATPDEA).
Since the ATPDEA was expected expiring by the end of 2006, the free trade agreement will eliminate uncertainty in trade relations between the two countries. The US Congress was very long in renewing a previous preferential treatment called ATPA (Andean Trade Preference Act).

14% RISE IN ITS US QUOTAS

A 14% rise in its US quotas granted by the Washington after labour conditions further improved in the low-cost country Cambodia. However, the increase in US limits will not help Cambodia in competing with China in the post-quota era.
For the last time, the United States offered Cambodia an accelerated growth in US quotas after working conditions apparently improved in apparel plants.
Under a bilateral agreement concluded in January 1999, the basic level of US limits may be more or less raised depending on working conditions. Under the same agreement, the International Labour Organisation (ILO) was asked to monitor garment factories and releasing an annual report on working conditions.
As a result, Washington raised by 14% its textile quotas on imports from Cambodia, much more than the basic increase but less than a maximum 18% jump in limits. These quotas may be again changed in the short term, however, since Cambodia is now joining the WTO after being accepted by member countries in September in Cancun.

TEXTILE INDUSTRY FACING COMPLAINTS FROM EU

Europe's textile industry is urging the European Union to clamp down on surging Chinese exports, in a sign of mounting concerns over China's assertiveness as a global trade power. Less than two months after the US took action to restrict trade with China, European industry leaders said they planned a formal complaint to the European Commission as a test case that could trigger other calls for protection. The European industry move came as China imposed dumping duties of up to 55% on steel imports from five countries - a further sign of Beijing's increasingly aggressive protectionism.
China has long been the biggest target of anti-dumping actions by other countries. However, it began launching its own anti-dumping cases - against imports priced at allegedly unfair levels - only in 2002.
The complaint over textiles is fresh evidence of concern in Europe and the US about growing competition from China, which is estimated last year to have become the world's third biggest exporter and importer. Washington announced import restrictions on several types of textiles and clothing from China in November, claiming a dramatic rise in Chinese imports was destroying American jobs.
Brussels has so far adopted a more cautious tone. However, the textiles complaint, which may trigger a formal Commission investigation, will add to pressure for a tougher European trade stance towards China.

SLIGHT COTTON DROP IN OUTPUT

China's leading cotton-producing area is expected to produce 782,700 tons of cotton during 2003-2004, close to that of 800,000 tons for last year, local officials said.
Officials with Agriculture Bureau of the Xinjiang Production and Construction Corps, which dominates commercial farming in the Xinjiang Uygur Autonomous Region, said the acreage under cotton for this year was close to 450,000 hacters, 13,300 hacters more than last year. Xinjiang has been the biggest producer of quality cotton in China.
New growing technology, including high-density, high-yielding planting technology and dripping irrigation technology, was used this year on scales much larger than last year, which has helped make up for the losses caused by natural disasters.

US APPAREL DUTY-FREE NEGOTIATIONS

The United States and the Dominican Republic are initiating free trade negotiations. The new agreement will not boost Dominican apparel exports, however, only limiting an expected decline in shipments to the US market.

The negotiations could be rapidly completed. A large part of provisions will be similar to those already included into the free trade agreement concluded between the United States and four Central American countries by the end of last year.

The Dominican Republic, could, therefore benefit from the cumulating in rules of origin already granted by Washington to El Salvador, Guatemala, Honduras and Nicaragua, including the possible use of textile materials from Mexico and Canada

SHIPMENTS OF DENIM FABRICS DECLINED IN 2003

Hong Kong's re-exports of denim fabrics again declined during the year 2003 in volume terms. Demand from Bangladesh continued sliding while Hong Kong imported more fabrics from India, the Philippines or Indonesia before re-exporting them to other countries and mainly to China. Hong Kong's trade in cotton denim fabrics further fell in the year, according to data compiled from official trade statistics.
In sharp contrast with lower sales to Asian countries, Hong Kong continued gaining shares in Nicaragua and Lesotho. Re-exports of denim fabrics to these countries were up 138% and 161% respectively. India, the Philippines and Indonesia enjoyed a rise of between 36% and 42% in shipments to Hong Kong during the period.

KARNATAKA TEXTILE INDUSTRY SEEKS GOVT HELP

Karnataka's textile industry should focus on modernisation and up gradation of its facilities to combat upcoming competition, said Assistant Director for textiles, Coimbatore, V K Narayanan Nair. In view of the imminent opening up of the domestic textile industry in 2004, he said that it was appropriate time for the industry in the state to focus on improving infrastructure.
The textile industry in Karnataka has been sinking because of lack of encouragement from the government, according to Mr T V Maruthi, Member of Federation of Karnataka Chambers of Commerce and Industry (FKCCI). Governments in Maharashtra, Gujarat and Tamil Nadu provide subsidised power and industrial sheds at concessional rates and Karnataka should do the same.
Karnataka has 90,000 power looms. However, they were being sold to neighbouring states because of a lack of capital for up gradation. The state would not be able to compete with neighbouring states unless the industry could modernise itself.

PLEA TO REMOVE DUTIES ON JUTE YARN

The Union Textile Ministry has urged the Union Finance Ministry to remove all duties on the import of jute yarn from Bangladesh. Mr S. Majumdar, Jute Commissioner, has formally made the proposal. According to him, the importers currently pay approximately 16% on duty while importing jute yarn from Bangladesh. It may be noted that Bangladeshi raw jute traders have been requesting the Indian Government to remove the import duty on raw jute.
Industry sources said that the average raw jute quality of Bangladesh is better than that of the Indian production. However, in almost every year, the total raw jute production overshoots its annual demand. As a result, the market tends to move in such a manner that jute growers suffer from un-remunerative prices.

GOVT MAY SET UP A BANK TO REVAMP TEXTILE INDUSTRY

Better days appear ahead for the over Rs 1,000-crore Indian textile machinery industry with the government considering providing level-playing field to the domestic industry in tariff. The authorities while providing more funds for restructuring of the textile industry is also expected to help the machinery industry. We may consider setting up of a textile bank to help provide funds for restructuring various segments of the textile industry, said Union Textile Minister Syed Shahnawaz Hussain.
He said a proposal for such a bank, on the lines of Nabard funding agriculture, would soon be sent to the Finance Ministry. The Minister stressed the need for a strong machinery manufacturing industry in the country for keeping the textile industry vibrant. The machinery industry should provide latest technology for textile industry, to be competitive in post-quota regime.

TEXTILE INDUSTRY TO LOSE MORE WORKERS

Textile producers have painted a grim picture of the outlook for the country's textile industry for the year 2004, predicting the closure of dozens of factories leading to a reduction of national output by around 20%. The slump will result in massive job losses, with a senior official of the Indonesian Textile Association (API) predicting 50,000 job losses in West Java alone. Apart from West Java, the other major textile center in the country is Central Java.
Lili Asdjudiredja, Chairman of API's West Java, said that around 20%-30% of the total textile factories in the industry might choose to close down in 2004 due to an inability to face cutthroat competition in local and international markets from producers from other countries. Automatically, this would mean an additional reduction from the present capacity utilization of around 60%. Many analysts have predicted that Indonesia's textile industry will struggle further to gain local and foreign markets due to its inefficiency.

TURKEY TO INVEST $15 MILLION IN TEXTILE INDUSTRIES

Turkey is to invest $15 million in Iran's textiles industry, said Public Relations Department at Iran's Ministry of Economy and Finance. The Ministry said it had issued licenses amounting to the sum of the investment by the Turkish partner in the project for production and dying mantle threads. It said the permission had been in accordance with article 6 of the law on supporting foreign investment.
Under the approval, $9.3 million would be in the form of cash resource, $3.3 million in the form of machinery, equipment and related parts, $2.435 million in the form of basic material, and $500,000 in the form of delivery of related know-how.

Anti-dumping tariffs against imports of phenol

The Chinese mainland has come out with a final judgment to impose anti-dumping tariffs against imports of phenol from Japan, the Republic of Korea (ROK), the United States and Taiwan Province starting from February 1. The tariffs, which range between 3 % and 144 %, will last for five years, according to a statement released yesterday by the Ministry of Commerce.
The yarn production in China totaled 9.28 million tons in 2003, up 16.08% over the 2002, according to the National Bureau of Statistics. The yarn production in December of 2003 was 830,900 tons, up 8.43% over the previous year. It is predicted that the yarn production in 2004 will top 10 million tons, with the textile production growth up to about 8%.

CLOTHING FACTORIES OFFERING 2,350 NEW JOBS

With the opening of several new factories there are around 2,350 jobs created at the clothing factories at Al Hassan Industrial Estate in the Northern governorate of Irbid, according to General Union for Workers in Textile, Garment and Clothing Industries.
The vacancies have become available after six to seven new clothing factories opened in Irbid recently in addition to the expansion of old factories there. According to Kharabsheh, Jordanians account for nearly 56% of the 34,000 workers employed in the Kingdom's QIZs (Qualifying Industrial Zones). There is still a 44% rate that we wish to be totally occupied by Jordanians.

APPAREL EXPORTS STILL SURGING

Jordan's apparel exports to the United States continued surging in the first ten months of 2003, although its two main neighbouring countries were confronted with war and terrorism. Far Eastern apparel investors are increasingly taking advantage of Jordan's duty-free and quota-free access to the United States.
According to the Bush administration, Jordan's economy could become a regional model in a Middle East this year devastated by war and terrorism. Jordan actually benefits of the recent establishment of so-called Qualifying Industrial Zones (QIZs) and a consecutive surge in apparel sales to the United States. Jordan's apparel exports to the United States rose 245% in 2000, 384% in 2001 and nearly doubled in 2002 to 292 million Jordanian dinars (US$414 million).

Rise in Garment Exports

According to the latest figures provided by the Ministry of Industry and Trade the export of garment of the country has increased. Garment exports increased by 34.8 %. Foreign trade rose during the first eleven months of 2003 by 8.6 % but the trade deficit widened by 14 % compared to that of the same period last year. Imports increased by 9.8 %, exports by 4.4 %and re-exports by 14 %, the ministry figures indicated.
In terms of the increase in exports value, sales to the US surged by 57.6 %, followed by those to Syria by 37.5 %. Exports to Iraq, Israel and India declined by 35.1, 25.5 and 12.2 % respectively. In terms of quantity, the US topped the list at 28.9 %, followed by Iraq at 12.6 % and India which received 8.6 %.
The trade surplus with the US rose to JD194.6 million compared to JD33 million in light of a 53.9 % rise in exports from the Qualified Industrial Zones and under the Free Trade Agreement signed between Jordan and the US. Exports to Saudi Arabia, the United Arab Emirates and Syria accounted for 6.7, 4.1 and 4.0 % of the total respectively.
US markets topped the list of buyers from Al Hassan Industrial Estate near Irbid during the past year accounting for 79 % of the estate $321 million total exports. Israeli markets came second accounting for $52 million or 16 % of the estate exports.
Irbid Chamber of Industry Chairman Maher Nasser said ready-made garments and textiles were the main exports accounting for 93 % of the estate overall exports to other countries followed by engineering, agricultural and veterinary drugs, fertilisers, plastics and leather products.

UNDERWEAR SALE PICKED UP

The annual underwear rush is on due to the tradition followed mostly by the woman which states that when the clock strikes 12 for the new year, those wanting love should be in red underwear and those wanting money should wear yellow. Despite the tough economic times that have gripped this country -- and the abundance of yellow and red unmentionables now available at clothing stores -- sales clerks say the desire for love is apparently outpacing the need for money.

SAFEGUARD MEASURES AGAINST TEXTILE IMPORTS

Peru is expected to announce safeguard measures against surging textiles and apparel imports from China. Peru's apparel exports to the United States are still surging at the same time. Peru could imminently impose quotas or higher duties on a large series of textile and apparel imports from China. Temporary safeguards should be taken as soon as possible. Such safeguards are allowed by the WTO, under certain conditions. China already warned that it would file any safeguard with the WTO.
Textile and apparel imports from China were apparently up 31% in 2002 to US$45 million. China's products are entering the country at cheap prices "that don't even cover the cost of the cloth". Similar complaints were made in other low-cost countries in the past months, including Mexico and South Africa.
Peru's apparel exporters may use any domestic fabric and still enjoy a duty-free access to the USA. The country grows cotton and has a relatively strong cotton textile industry.

FREE TRADE PACT WITH USA

A free-trade agreement between Singapore and the United States, Washington's first with an Asian country, will come into force from January 2004. From January 1, 79% of Singapore goods will immediately enjoy duty-free entry into the United States, rising to 92% within four years. All US goods entering Singapore will be duty-free with immediate effect. Singapore will also further open up its economy to American companies.
Initial estimates show the island-state will save between 200 million and 300 million Singapore dollars (US$118 million and US$176 million) as a result.
There are already 1,300 American companies and 15,000 US nationals in Singapore, where private US investment is estimated at more than $27 billion. Singapore's free-trade pacts with Japan, Australia, New Zealand, and the European Free Trade Association have already entered into force.

YARN PRODUCTION STABLE

The latest quarterly State of Trade Report from the International Textile Manufacturers Federation (ITMF), Switzerland, reveals a stabilization of global yarn production during the second quarter of 2003, with gains in some regions offsetting lower output in others. North American output rose 9%, while South American production was 13.3% lower. A European gain of 1.8% offset a 0.7% Asian decline.
Annualized global yarn output rose 1%, reflecting an Asian increased output of 4.6% - largely due to increases in Pakistani yarn production. The Asian increase offset reductions of 13% in Brazil, 2.5% in Europe and 1.1% in the United States.

TEXTILE EXPORTS RECORD 13-YEAR LOW

The weak global economy and fierce competition from China are expected to push down South Korean textile exports to the lowest point in more than a decade this year, the Korea Federation of Textile Industries said. The Federation said that export figures from January to November reached US$12.7 billion, which is a 3% dip compared to the same period in 2002.

At this rate, Federation insiders said, exports may be hard pressed to reach the $15.2 billion mark that has been set as this year's goal. This number in itself is the lowest since 1990, when the country shipped out $14.7 billion worth of goods.

South Korean textile exports managed to pull off a comeback in the 1990s, but started to lose steam three years ago when volume fell off to $18.7 billion. This fell further to $16.0 billion and $15.6 billion in 2001 and 2002, respectively.

DENIM IMPORTS PLUNGED

Thailand's imports of denim fabrics plunged in the past months while denim exports further increased. Imports from the United States surprisingly rose, while China's share of the market sharply fell. Thailand's imports of denim fabrics dramatically decreased from last May after sharply rising in 2002 and the first six months of 2003. Hong Kong and China remained the two largest suppliers in the period but imports were down 35% and 51% in the January-june period, respectively.
Consumption of denim apparel is rapidly rising in Thailand in line with higher purchasing power. Apparel imports are soaring at the same time, however, mainly due to proximity with such low-cost countries as China or other ASEAN members, including Cambodia and Vietnam.
Neighbouring Cambodia is the main destination of Thai denim fabrics, accounting for 50% of total exports in baht terms, followed by Bangladesh, Germany, Netherlands, Morocco and Italy as a clear sign of an increasing globalization in denim market.

DENIZLI'S TEXTILE EXPORTS UP 17.3%

Textile and clothing exports from Turkey's Denizli province have increased 17.3% year-on-year to EUR640.4 million for full-year 2003. Exports from Denizli-based textile companies to European Union countries reached EUR454.1 million for the year, with exports to Germany increasing 38.5% year-on-year to EUR161.2 million. Exports to the United States, meanwhile, were down 15.7% year-on-year to EUR130.7 million.

The Western Turkish province exported to 93 countries during the 12-month period.

CHINA-US TEXTILE TALKS KICK OFF

Trade talks between the United States and China ended in an apparent stalemate with neither side able to defuse a textile row that resulted in a US threat to slap tariffs on Chinese bras, knit fabrics and dressing gowns. United States and Chinese textile delegations met in Beijing on January 12 and 13 to consult on matters of mutual concern, including US safeguard actions on three textile products, the US Embassy said. Each side presented its view on the actions and committed to a further dialogue on issues related to the bilateral textile trade. Both sides agreed to look for ways to cooperate in the textile sector.
Under pressure to protect jobs in sensitive industries ahead of a Presidential election campaign this year; the US said it would cap imports of Chinese bras, knit fabrics and dressing gowns, limiting the growth to 7.5% annually. The US said the products were being "dumped" on US markets, or being sold for prices less than the cost of the products. If the two sides fail to reach agreement, the US can unilaterally impose a 7.5% growth cap on exports of the three goods.

JBIC ALLOCATES $9.5 MILLION FOR TEXTILE COMPANY

Japan Bank for International Cooperation (JBIC) allocated a loan of about $9.5 million to Uzbek- Turkish joint venture Turon Textile for a cotton yarn plant. The loan is for 10 years and is guaranteed by the Uzbek government.
The plant, which is to be built in Khorezm region, will have the capacity to produce 3,411 tonnes of cotton yarn a year. The project will cost $17.16 million. Turon Textile will provide the rest of the necessary funds.

RANKING SECOND AFTER MEXICO

Quota utilization would have again increased for a large series of countries without the surge experienced in quota-free imports from Vietnam in the first part of the year. US buyers continued taking advantage of the recent fall in US tariffs on Vietnamese products. Imports from Vietnam reached the very high level of 11.45 million dozen by the end of November, up 410% from the previous year and now ranking second after Mexican trousers.
The US quota imposed on the 8-month period from May to December was limited to 4.66 million dozen. The limit was rapidly reached with no less than 5.23 million dozen trousers from Vietnam being cleared by the US Customs between May-December 17th, due to an adjustment in Vietnam's quota, the fill rate remained below 100%.

Vietnam's quota for 2004 should not exceed 7.5 million dozen trousers. Although a very high level compared with limits imposed to many other countries, this is far below imports of 2003. Other Asian low-cost countries could benefit from the planned decline in Vietnamese exports as a consequence.

The nation's textile industry is facing major reshaping and a shakeout, with liberalization of the global textile trade with the World Trade Organization (WTO) set to go into effect next year, industry analysts predicted.

Effective Jan. 1, 2005, the so-called Multi-Fiber Agreement, intended to regulate the world's textile exports, will be replaced by the WTO's Agreement on Textiles and Clothing (ATC), resulting in the abolition of textile trade quotas.

The nation's clothing industry is expected to yield more than 20 trillion won ($16.7 billion) in sales this year, but the looming elimination of trade quotas by the World Trade Organization means Korea's textile industry could soon face major problems. Korea's clothing market is expected to grow a record 7% to 20.6 trillion won in sales this year on the back of an improving economy, reported MPI, a local clothing and textile consultancy.

Since Jan. 1, 1995, textile and clothing trade among WTO members has been governed by the Agreement on Textiles and Clothing, which phases out quotas progressively in the European Union, the United States and Canada over a 10-year period. The Federation said that China's textile and clothing producers, backed by low labour costs, would seriously cut into South Korean firms' exports to the United States and the European Union.

China, with the momentum of this agreement, is predicted to lift its share of global textile exports to more than 50% by 2010. The challenge for Korean clothing makers will be exacerbated by strong exports from Southeast Asian and Latin American countries after 2004. As such, domestic firms are already cutting costs by moving production facilities abroad and diversifying export and product lines.