TRALAC - Trade Law Centre

US Curbs on Chinese Textiles bring little Relief for Africa

Thursday, 02 June 2005

Source: New Era (Windhoek)

US curbs on Chinese textile exports will give only temporary relief to African producers, so Africa must implement economic reforms to help firms make more competitive garments, a U.S. trade official said yesterday.

Sub-Saharan African states have seen their textile industries grow sharply in the last five years thanks to a preferential trade deal with the United States, the African Growth and Opportunity Act (AGOA).

AGOA provides the poor countries with duty and quota-free access to the $11 trillion US market.

But that advantage is under threat due to a surge in textile imports from China and Asian countries who have increased exports to the United States and Europe after the end of the global quota system on January 1 under the World Trade Organisation (WTO).

The United States and the European Union in May announced temporary measures to limit Chinese textiles exports to their markets, rekindling hopes among African exporters that they may grab a larger slice of the US market.

But US Assistant Trade Representative for Africa Florizelle Liser said the measures are not the answer to the problem of Africa's textile industry.

"There is no guarantee that African producers will benefit from the safeguards given the stiff competition from many other countries," she told a gathering of business representatives from the Common Market for Eastern and Southern Africa (COMESA) trade bloc attending a summit in Rwanda's capital Kigali.

"Please bear in mind that these safeguard measures are temporary."

Officials say African producers cannot compete with more efficient and subsidised firms in India, Pakistan and Turkey, which are also making inroads into the US and European market.

Many textile factories in sub-Saharan Africa have closed, eliminating jobs for thousands of employees, especially women. African governments are worried.

"In our region, countries such as Madagascar, Mauritius, Kenya, Malawi and Uganda have already lost thousands of jobs as the international textile (manufacturers) relocate to the Asian countries," said Daudi Migereko, Uganda's trade minister.

Liser said African governments must streamline transport regulations on the continent, boost the supply of reliable electricity and water, improve customs clearance, access to bank credit and free-up telecommunication and financial services.

"If AGOA apparel producers hope to remain competitive in the long-term they will need to focus on policy decisions and business measures to improve their own competitiveness," she said.

Experts say Africa also needs to deepen regional integration to develop its cotton and yarn sectors before a provision under AGOA, which allows them to import cheap third country fabric from Asian countries, expires in two years time.

The expiry of the provision in September 2007 means Africa must use fabric produced in the region.

Liser said Africa should aim to produce top quality clothing and diversify to other products other than textile and oil if it is to continue benefiting from AGOA.

"AGOA covers far more than apparel and many COMESA countries have begun to export other non-oil, non-apparel goods under AGOA," she said. "However, we have just begun to scratch the surface of what is possible under AGOA."

Other products exported to the United States under AGOA include pyrethrum from Rwanda, fruits and nuts from Malawi, processed fruit products from Swaziland, footwear from Mauritius, basketry and wickerwork from Madagascar.

Liser said the United States hopes an AGOA summit to be held in Senegal in July will also pursue measures to ensure the AGOA trade deal benefits many more African countries.