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Mauritius: Country Eyes Southern Africa As US, EU Textile Exports Flounder

Published date:
Tuesday, 27 June 2006

Mauritius is shifting attention to southern Africa as it seeks to revive the fortunes of its key textiles sector affected by the 2005 removal of export privileges into the United States and European Union (EU).

A mountainous island on the Indian Ocean to the east of Madagascar, Mauritius is one of the countries negatively affected by the 2005 removal of a quota system that had protected European, American and Canadian textile industries from cheap Asian imports while guaranteeing easy access to African textile and apparel producers.

The new trade rules, negotiated at the World Trade Organisation and which took effect from January 2005, opened up to market forces the textiles sector, hitherto protected for more than 30 years.

Since 2005 developing countries have had to contend with stiff competition from more efficient producers in countries such as China and India.

As a result, thousands of jobs have been lost and factories closed in countries such as Lesotho, Madagascar, Malawi, Mauritius, Namibia, South Africa, Swaziland, Tanzania and Zambia.

To counter the effects of the new trade rules, Mauritius has instituted a number of measures aimed at keeping its textiles sector afloat.

The country has been restructuring its clothing and textile industry, focusing more on niche products and items made from synthetic fibres that still enjoy favourable terms of trade under the United States' Africa Growth and Opportunities Act (AGOA). AGOA offers easy access of African products into the US.

Mauritius is also giving more attention to its neighbours in the Southern African Development Community (SADC), a regional body with a potential market of 240 million people. Mauritius is one of the 14 SADC member states.

Exports to SADC have grown steadily since 2000 when the region accounted for 1.5 percent of total Mauritian exports. In 2004 - the latest year for which figures are available - SADC exports had risen to 2.9 percent of Mauritian exports.

South Africa is the largest market for Mauritian products, accounting for about 84 percent in 2004, while Tanzania and Mozambique accounted for seven and five percent, respectively.

The country launched a new trade show in June this year - Mauritius for Africa - to promote its industry in the SADC and Common Market for East and Southern Africa (COMESA).

An estimated 300 firms and individual buyers from Ethiopia, Kenya, Madagascar, Seychelles, South Africa, Tanzania, Uganda and Zambia attended the trade show.

There were exhibitions from producers in the textile and clothing, food and beverages, information technology, plastic and allied products, chemicals, cosmetics, printing, publishing and paper products sectors.

The Indian Ocean nation of about 1.2 million people has emerged as one of Africa's economic success stories.

From the 1960s when its economy was reliant on the production of sugar cane, the country has experienced an economic revolution largely driven by the growth of its textiles and clothing sector.

Establishment of an incentive-driven export processing zones (EPZ) system in the 1970s resulted in a booming clothing and textile industry that spearheaded economic growth for over 30 years.

By focusing on export-led growth, the clothing and textile industry emerged as the primary manufacturer within the EPZs and became one of the main pillars of the economy. It exported a bulk of its production to the EU and US markets.

As a member of the African, Caribbean and Pacific countries, Mauritius was able to export duty-free and quota-free to the EU under the 1975 Lome Convention and its successor agreements.

With the coming into force of AGOA in October 2000, Mauritius has been exporting clothing and textiles to the US.

Under these favourable trade policies, a strong and vibrant clothing and textile industry developed in Mauritius until last year when the new WTO rules came into force.

The sector employed 40 percent of the workforce, produced 12 percent of Gross Domestic Product and earned 60 percent of foreign currency inflows into Mauritius.

The clothing and textile industries began to flounder in the face of direct competition from more efficient Asian markets, mainly China and India.

Between 2003 and 2005 Mauritius closed 30 companies that employed 15,000 textile workers and by 2005 textile shipments from Mauritius to the United States were down by 17.5 percent on 2003 figures.

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