Outlook For Asian Textile And Clothing Trade In The Post-quota Era

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Outlook for Asian Textile and Clothing Trade in the Post-Quota Era
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On December 31, 2004, quotas were eliminated under the Agreement of Textiles and Clothing (ATC) and trade in textiles and clothing was thus reintegrated into the world trade system. When the ATC was conceived in 1994, the gains from quota elimination were expected to go to low wage and populous Asian countries such as India, Indonesia, Pakistan, the Philippines and Thailand The losers were predicted to be small and marginal exporters, former large quota holders in East Asia, and firms in the EU and the USA. But the outlook for Asian suppliers other than China has been changed by China's entry to the World Trade Organisation (WTO) in late 2001 and its growing dominance of Western markets. Asian suppliers will also be impacted by preferential trade agreements (PTAs) giving non- Asian partners duty-free access to the EU and the USA. The proliferation of PTAs has cast doubt on whether Asian suppliers other than China will achieve the gains they were promised.

The USA, the EU and a few other WTO members have used safeguard quotas to protect ...
... their markets in the post-quota era. In the first few months of 2005 China made strong inroads into EU and US markets—at the expense of preferential suppliers and former large quota holders in East Asia. In contrast, Asian suppliers such as India, Indonesia, Bangladesh, Pakistan and Sri Lanka maintained or slightly improved their positions in the US market. Some are moving into higher quality products as they adjust to low cost competition from China. Meanwhile, in the post-quota era, efficient Asian production networks continue to be undermined by EU and US preferential trade deals, enforced by restrictive rules of origin. Such a situation could be avoided if negotiators at the WTO Doha Round were to prove successful in reducing EU and US textile and clothing import tariffs.
Table of Contents
Introduction

Post-quota developments in the US market

Imports of clothing by volume
Cotton clothing
Man-made fibre clothing
Baby garments made from cotton or man-made fibre fabrics
Imports of intermediate textile products by volume
Cotton textile intermediate products
Man-made fibre textile intermediate products
Blended textile intermediate products
Imports of clothing by value
Imports of textile intermediate products by value

Post-quota developments in the EU market

Imports from China
Clothing
Textile intermediate products
Imports from eight other Asian suppliers
Clothing
Textile intermediate products

Impact of post-quota developments on preferential suppliers

Mexico and Canada: restrictive rules of origin
Jordan, and Central and South America: less restrictive rules of origin

Conclusions

List of tables

Table 1: USA: status of China safeguard quotas in place on October 21, 2005
Table 2: Products and quota levels agreed under the US-China Memorandum of Understanding on Textile and Apparel Trade, November 2005
Table 3: USA: imports of clothing made from cotton, by volume, Jan-Jul 2004 and Jan-Jul 2005
Table 4: USA: imports of clothing made from man-made fibre, by volume, Jan-Jul 2004 and Jan-Jul 2005
Table 5: USA: imports of baby clothing made from blended fabrics, by volume, Jan-Jul 2004 and Jan-Jul 2005
Table 6: USA: imports of cotton textile intermediate products, by volume, Jan-Jul 2004 and Jan-Jul 2005
Table 7: USA: imports of textile intermediate products made from man-made fibres, by volume, Jan-Jul 2004 and Jan-Jul 2005
Table 8: USA: imports of blended textile intermediate products, by volume, Jan-Jul 2004 and Jan-Jul 2005
Table 9: USA: imports of clothing, by value, Jan-Jul 2004 and Jan-Jul 2005
Table 10: USA: imports of textile intermediate products, by value, Jan-Jul 2004 and Jan-Jul 2005
Table 11: EU25: imports of clothing from China, selected product categories, by volume and value, 1 qtr 2004 and 1 qtr 2005
Table 12: EU25: imports of textile intermediate products from China, by volume and value, 1 qtr 2004 and 1 qtr 2005
Table 13: EU25: imports of clothing from eight Asian suppliers (excluding China), selected product categories, by volume and value, 1 qtr 2004 and 1 qtr 2005
Table 14: EU25: imports of textile intermediate products from eight Asian suppliers (excluding China), by volume and value, 1 qtr 2004 and 1 qtr 2005

List of figures

Figure 1: The inverse relationship between initial market share and growth of US clothing imports from China, 1 qtr 2004 and 1 qtr 2005
Figure 2: The inverse relationship between initial market share and growth of EU clothing imports from China, 1 qtr 2004 and 1 qtr 2005

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