TRALAC - Trade Law Centre

African Garment Makers Form Regional Body

Tuesday, 24 May 2005

Source: The East African (Nairobi)

Sub Saharan African textile and garment manufacturers will form a regional body to counter the effects of competition from China and the imminent expiry of the Africa Growth and Opportunity Act (Agoa). The plan to create an industry body was endorsed by Comesa and the East African Community (EAC) at a cotton and textile executive summit in Nairobi last week.

The event was organised by the Regional Agricultural Trade Expansion Support Programme (RATES), a US Agency for International Development (USAid) funded project in collaboration and with Comesa, EAC, the International Cotton Advisory Committee (ICAC) and the East and Central Africa Competitiveness Hub. It was hosted by the textile sector and apparel manufacturers in Kenya.

Working at Kenya's Export Processing Zone. Six EPZ investors closed down last year

African producers have also been hard hit by the termination of the Multi-Fibre Agreement (MFA), which came to an end in January. The MFA was introduced 30 years ago to protect the textile industries of developed countries by imposing quotas on high-volume producers such as China, Korea and India.

Kenya, which has preferential access to the US market through Agoa has already been affected by the expiry of quotas under the MFA.

Since October last year, six investors operating in the Export Promotion Zones have closed shop and in the process, about 6,000 jobs have been lost. It is feared that most of the 39,000 jobs created during the four years Agoa has been in effect could also be lost.

A study whose findings were released by the World Trade Organisation last September, showed that China and India are likely to dominate about 80 per cent of the global textile industry in the post-MFA era, leaving a mere 20 per cent to be shared by the rest of the world. The study predicts that 27 million workers around the world will lose their jobs with the end of the MFA.

In the first three months of this year, China increased production of men's cotton trousers for export by 1,000 per cent. China is expected to become "the supplier of choice" for most US importers because of its ability to make almost any type of textile or apparel product, at any quality level, and at a competitive price, says the WTO.

An interim steering committee will be set up to immediately start building co-operation, interaction and linkages within the region and to start addressing the key issues that arose from the summit. To date, there has been no representation for this region in the global marketplace and individual countries have tended to act in isolation," says Barry Fisher, a cotton and textile specialist at the RATES programme.

"For the first time, East Africa has the opportunity to become a unified and recognised voice in both regional and global trade affairs," .

The West Africans organised themselves at the Cancun ministerial conference in 2003 and they were listened to by the international community.

However, according to Andy Sisson, USAid's director of regional economic development service, the mere formation of the regional organisation may not be sufficient to address all the key issues and the constraints affecting the immediate future of the industry.

"You will need to form a regional network that is not a "stand-alone" entity but one that incorporates all the lead players so that they may play a key role in revitalising the sector and carrying it forward," he said.