China Calls for Caution on Textiles Trade
International trade expert in the Ministry of Trade and Industry, Noko Murangi, yesterday contended that the elimination of the World Trade Organisation (WTO) on Textiles and Clothing quotas would have ramifications for Namibian textile companiesÿ
However, he was quick to add that the African Growth and Opportunity Act (AGOA) arrange-ment with some African countries, including Namibia, signalled that the American market would not fully lift the veil, or wholly open up its own market just yet.
Textile quotas on imports would be done away with on January 1, 2005.
The elimination of the WTO agreement raised fears from smaller textile producing countries that they would be forced to compete with bigger producers such as China and India. Concerns are that especially African textile producers will suffer in the transformation of the WTO trade regime, estimating that the textile and garment exports could plunge by 70%.
Namibia does not have a diversi-fied market, and the USA forms the single most important export market for textile products.
But, said Murangi, Namibia's lifeline is the AGOA initiative, a "self-selecting instrument" by the USA, that was extended first to 2008 and then to 2015. Under this initiative textiles, apparel, fishing products, stones and minerals are the main exports to the USA from Namibia, giving these products preferential access to the USA.
Murangi thus suggested that it is important for Namibian companies to reposition themselves should the American market realign itself. "But there is still quite a long distance to go," he commented, saying that there was no immediate threat or displacement to these industries.
"Companies like Ramatex would have supply contracts with com-panies in America - they must have secured those channels. Companies would have to provide guarantees that their wares reach those markets."
He further commented that pressure is mounting for internal reforms in China before Americans and other markets look to that country for supplies. "This provides a country like Namibia a zone of comfort if you like," Murangi added.
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