AFRICA: Regional body to counter cheap textile imports

[ This report does not necessarily reflect the views of the United Nations]

JOHANNESBURG, 3 May 2005 (IRIN) - Sub-Saharan African textile and garment manufacturers are set to develop a regional trade association in response to heavy competition from low-cost Asian producers in a quota-free global market, an industry insider told IRIN.

The idea of the new body was agreed at a Regional Cotton and Textile Executive Summit, held in the Kenyan capital, Nairobi, last week. The conference was organised by the Regional Agricultural Trade Expansion Programme, a US Agency for International Development-funded project.

"An interim steering committee has been set up at the moment to build cooperation, either through the manufacturing process or intra-regional trade agreements," said Brian Brink, executive director of the Textile Federation, the official organisation of the South African textile industry.

Brink pointed out that the theme of the summit was 'The Future Belongs to the Organised' and followed the opening of the key US market to efficient Asian producers at the beginning of the year.

Realising the need to act in a cohesive manner, the manufacturers will use the new association to address key policy issues and build a platform for reducing constraints in regional trade.

"We also need to exchange information, share regional expertise and build partnerships, alliances and networks - members of the new association will keep in touch through the internet and will meet periodically," Brink explained.

African producers have been hard hit by the termination of the Multi-Fibre Agreement (MFA), which came to an end in January this year. 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.

Countries like Lesotho and Swaziland, which had preferential access to the US market through the African Growth and Opportunity Act (AGOA), have already been affected by the expiry of quotas under the MFA, which kept competition from low-cost producers at bay.

Six clothing factories in Lesotho failed to reopen after the December 2004 holidays, and the Swazi government estimates that a third of all garment industry jobs - about 15,000 - will be lost by mid-year.

The governments of individual countries should pool their resources with business to keep the textile industry afloat in the region, suggested Eckart Naumann, an economist and associate of the non-profit Trade Law Centre for Southern Africa.

South Africa, to an extent, has shown the way for the rest of the region. "As of last month, South Africa has the legislative tools in place to control textile imports into the country," Naumann said. The legislation is in line with World Trade Organisation regulations that allow countries to impose import quotas when its domestic industries are threatened.

Later this month, all garments sold in South Africa will have to bear labels providing details of their source of origin. The labels will also bear the producer's tax registration number.

"This legislation, which becomes effective from 23 May, will not only check import duty fraud but will also inform the purchasing decision of the consumer," Naumann explained.

[ENDS]