WTO Implications for Engr. Akber Sheikh akbers@yahoo.com.
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WTO Implications
for
Engr. Akber Sheikhakbers@yahoo.com
WTO ISSUES
-TEXTILE TRADE INTEGRATION(2004)
-LOWERING OF TARIFFS
-EXPIRY OF TRIMS CONCESSIONS(2004)
-TRADE REMEDY ACTIONS
-TECHNICAL BARRIERS TO TRADE
-ENVIRONMENT
-REGIONAL/PREFERENTIAL TRADE AGREEMENTS
-SINGAPOREAN ISSUES
BUSINESS ADVOCACY& TRADE DIPLOMACY
-DOHA ROUND-RTA’s-TIFA-THE CHINA FACTOR
THE INFORMATION GAP
-DOHA ROUND
-TRADE REMEDY DEFENCE-TRADE REMEDY COMPLAINTS-DISPUTE SETTLEMENT-RTA’s-COMPLIANCE DATES & PLANNING-IMPLEMENTATION ISSUES-MFN STATUS-TEXTILE QUOTAS
COMPETIVENESS ISSUES
-HUMAN RESOURCE DEVELOPMENT
-EFFICIENT INFRASTRUCTURE• UTILITIES .PORTS .DRAINAGE & EFFLUENT
• TREATMENT .SALES TAX .INVESTMEN IRRITANTS
-TRUE ZERO RATING OF EXPORTS
-INPUT COSTS
RECOMMENDATIONS
-EFFECTIVE INFORMATIONS DISSEMINATION
MECHANISM
-EFFECTIVE BUSINESS ADVOCACY FORUM
-ECONOMIC RESEARCH UNIT
-TRADE REMEDY ACTION COMMITTEE
-TRADE DISPUTE SETTLEMENT BODY
COMMITTEE
-IMPLEMENTATION & COMPLIANCE
COMMITTEES
Textile SectorProblems, Issues and
Recommendations
Cotton Balance Sheet
Cotton Consumption (Million Bales)
8.544
11.363
4.000
5.000
6.000
7.000
8.000
9.000
10.000
11.000
12.000
1991-92 2002-03 (Projected) *
•Consumption of 500,000 spindles in unorganized sector is not accounted for. Source: TCO
Cotton Stock to Use RatioCotton Stock to Use Ratio
• Pakistan despite being 4th largest producer of cotton, has an extremely low stock of cotton reserves, i-e only 13% of its consumptions. Lowest in comparison to its competitive countries
Source: USDA
0%
20%
40%
60%
80%
100%
Cotton Stock to Use Ratio
% of Cons. 13% 46% 86% 32% 29%
Pakistan China USA India EU-15
World Fiber Consumption (Thousand Tons)
-
5,000.00
10,000.00
15,000.00
20,000.00
25,000.00
30,000.00
35,000.00
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001
CottonNon-Cotton
The projected demand of fibers in the world is estimated by studies to reach 84,850,000 metric tons by the year 2010. MMF would take 67.7 % share of this demand and the rest of 32.3% would be filled by all natural fibers .
Source: Asian Textile Journal
Cotton Requirement 2006-07 Staple Length Wise
Category Staple Length Yarn Counts Cotton Required (Million Bales)
1
1-1/32 1-1/16
1-1/8
MEDIUM
1-3/32
1s-36s 10.500
1-3/16
1-7/32 1-1/4
1-8/32 1-5/16
1-11/32
LONG
1-3/8
37s-60s 3.750
1-13/32 1-7/16
1-15/32 EXTRA LONG
1-1/2
60s-120s 0.750
Total 15.000
Textile spinning industry, which was once bench- marked as one bale per spindle per year, is now consuming more than 1.3 bales per spindle.
Source: APTMA
Investment plan recommended
Stitching Machines (No.) Do-Able
New Capacity
High Road New
Capacity
Recommended New Capacity
Invest Rs bill
Stitching Machines (No.) 109,003 388,068 388,068 39 Processing in Weaving (M sq. m) 3,218 2,742 3,218 73 Processing in Knitting (M kg) 294 365 365 7 Knitting Machines (No.) 3,609 7,327 7,327 29 Shuttle-less looms 0 0 0 0 Air Jet Looms 10,348 7,744 10,348 54 Power & Auto Looms-Cotton (No.) 0 0 0 0 Auto/Power Looms-Synthetic 0 0 0 0 Weaving- Water jet 1,458 10,489 1,458 6 Spinning (Spindles) 4,326,884 4,326,884 4,326,884 87 Polyester fiber (Tons) 130,499 213,499 213,499 29
Total 295
Source: APTMA
------THE CHINA FACTOR------ USA TEXTILE IMPORTS
S.# Country 2001 2002 % Charge
1 World 32811.747 38287.647 15.59
2 China P 2210.674 4963.116 101.24
3 Mexico 4289.934 4335.089 -9.93
4 Canada 3267.516 3386.791 2.81
5 Pakistan 2189.346 2536.917 5.55
6 Kor Rep 1383.482 2032.158 2.15
7 India 1250.245 1544.604 16.48
8 China T 1224.379 1391.379 0.32
9 Thailand 1308.481 1315.546 -15.92
US TEXTILE IMPORTSFROM PAKISTAN
S.# Product 2001 2002 % Charge
1 Total MFA 2189.346 2536.917 5.55
2 Apparel MFA 347.009 382.067 30.83
3 Non-Apparel MFA 1842.337 2154.850 1.69
4 Yarns 276.988 297.516 -24.51
5 Fabrics 475.592 695.948 -4.11
6 Made Ups/Misc. 1089.757 1161.387 11.65
7 Cotton Products 1782.967 2061.727 7.85
8 Cotton Apparel 290.349 318.433 27.81
9 Cot. Non-apparel 1492.617 1743.293 4.72
US TEXTILE IMPORTS FROM BANGLADESH
S.# Product 2001 2002 % Charge
1 Total MFA 1169.041 1149.765 -1.9
2 Apparel MFA 965.942 927.717 4.3
3 Non-Apparel MFA 203.099 222.048 -19.15
4 Yarns 0.807 1.687 70.44
5 Fabrics 10181 6.393 -68.57
6 Made Ups/Misc. 192.112 213.968 -17.36
7 Cotton Products 702.638 701.001 -0.76
8 Cotton Apparel 601.968 577.162 2
9 Cot. Non-apparel 100.67 123.639 -12.77
US TEXTILE IMPORTSFROM CHINA
9
8
7
6
5
4
3
2
1
S.#
49.861188.134600.791Cot. Non-apparel
77.19653.218342.832Cotton Apparel
58.831841.353943.623Cotton Products
146.202753.929882.006Made Ups/Misc.
12.72612.630331.065Fabrics
3.8131.59421.624Yarns
111.993398.1531234.695Non-Apparel MFA
77.531564.963975.980Apparel MFA
101.244963.1162210.674Total MFA
% Charge20022001Product
US TEXTILE IMPORTSFROM MEXICO
9
8
7
6
5
4
3
2
1
S.#
-6.96394.939412.253Cot. Non-apparel
-3.521123.1441145.007Cotton Apparel
-4.511518.0821557.260Cotton Products
-19.591041.608953.287Made Ups/Misc.
-16.62569.980443.132Fabrics
-5.27566.304603.373Yarns
-14.732177.8931999.793Non-Apparel MFA
-4.952157.1962290.142Apparel MFA
-9.934335.0894289.934Total MFA
% Charge20022001Product
US TEXTILE IMPORTSFROM INDIA
9
8
7
6
5
4
3
2
1
S.#
2.98869.029781.035Cot. Non-apparel
17.36338.751250.102Cotton Apparel
7.441207.7801031.137Cotton Products
17.41842.502683.713Made Ups/Misc.
9.63169.754151.196Fabrics
40.3423.63312.525Yarns
16.601035.889847.434Non-Apparel MFA
16.28508.715402.811Apparel MFA
16.481544.6041250.245Total MFA
% Charge20022001Product
• ATMI Analyzed Chinese Growth into US Market in all 29 Apparel categories removed from quota control onJanuary 01, 2002
• KEY POINT: First time the China competing head to head withoutquotas with everyone else – Vietnam,Bangladesh, India, Mexico…..
29 INTEGRATEDCATEGORIESCHINESE SHARE BY DOLLAR
Apparel 2001 2002 Percent Change
Cotton 17% 28% 65%
Man-made Fiber 13% 22% 69%
Wool Apparel 11% 9% -18%
Vegetable Fiber 27% 53% 96%
Mixed 6% 26% 333%
Total 15% 31% 106%
29 INTEGRATED CATEGORIESCHINESE SHARE BY VOLUME
Apparel 2001 2002 Percent Change
Cotton 11% 28% 155%
Man-made Fiber 8% 24% 200%
Wool Apparel 11% 12% 9%
Vegetable Fiber 20% 54% 160%
Mixed 3% 27% 200%
Total 9% 31% 244%
PROJECTED EXPORT LOSSES TO
CHINA (POST 2005)S.# Country/Region Loss $ Mil.
1 CBI 6279
2 Mexico 5423
3 India 2623
4 EU 2477
5 Hong Kong 2285
6 Canada 1861
7 Honduras 1763
8 Korea, South 1620
S.# Country/Region Loss $ Mil.
9 Pakistan 1412
10 Indonesia 1390
11 Turkey 1316
12 Dominican Republic 1287
13 Taiwan 1282
14 Guatemala 1265
15 Philippines 1236
16 Italy 1218
17 Thailand 1161
18 Bangladesh 1051
19 El Salvador 1015
29 INTEGRATED CATEGORIESAverage Price Per Square Meter
Pre and Post Quota Removal
Country 2001 2002 Change
China $ 5.79 $ 3.24 -44 %
Rest of World $ 3.55 $ 3.47 -2 %
29 INTEGRATED CATEGORIESAverage Price Per Square Meter
Pre and Post Quota Removal
Country 2001 2002 Change
China 142 554 + 412
Rest of World 1,439 1,238 -201
29 INTEGRATED CATEGORIESAverage Price Per Square Meter
Pre and Post Quota Removal
Country 2001 2002 Change
China $ 824 $ 1,792 + 967
Rest of World $ 5,104 $ 4,303 - 801
• ATMI has requested safeguard actions using new China WTO safeguard provisions.
• No action has been taken yet.
• US Imports from China in sensitive categories have gone up an average of 600 percent over the past year!
China Growth:Sensitive Categories
China increased its exports by a RECORD 2.8 billion square meters. 96% of China’s increase was in quota de-controlled categories.
Why is China Unbeatable?According to ATMI
• OVER 50 % OF CHINA’S TEXTILE SECTOR IS STATE – OWNED AND SUBSIDISED
• VAT REFUND REGIME IS A HIDDEN SUBSIDY• CHINA’S CURRENCY IS UNDERVALUED• .$500 BILLION IN NON-PERFORMING LOANS
HAS A SUBSIDY EFFECT• CHINA’S TEXTILE INDUSTRY IS INDULGING IN
PREDATORY DUMPING
• IS IT TRUE ?
WHAT IS OUR
FUTURE
????
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