Turkey has declared a list of antidumping duties against the import of textile and apparels into the country. While heated debates are occurring stating this is only to protect the domestic industry, and a controversial statement asserting this is a political ruse, what is the opinion of the foreign exporters, and domestic importers?

Textile sector is one of the major contributors of the Turkish economy with a 12.2% average annual growth. Investments in the sector is more than USD 150 billion of which, around 50 billion was invested during the last 5-10 years. With a view to protect its domestic textile industry from the flooding imports, Turkey has imposed import duties on fabrics imported into the country. China will have a major impact of the duty, followed by other Asian counter parts India, Pakistan, Bangladesh, Vietnam, and Indonesia.


The Turkish Government received complaints from the domestic manufacturers that textile imports into the country are hurting the local industry. Following the investigations done, Turkey has planned to increase its import duties from July 21st onwards; this year. The Council Of Ministers proclaimed on March 24th about implementing safeguard duties on the import of specific fabrics, apparel, and other apparel related accessories.

Turkey pushes exporters in dire strait with import tariffs

Duty rates are increased by 20% for fabrics. Rates would be from 5-33% on woven fabrics, apparel, footwear, and other products. For apparels, duty rates vary from country to country, starting from 0-17% for least developed countries, till 9-36% for developed countries. Asian countries would be the most affected.


Textiles and apparels imported from Bangladesh will have a 17% duty. The country is the second largest exporter of fabrics to Turkey, next to China. During 2010, Bangladesh shipped $650 million worth of apparels, which is more than one fourth of Turkeys total textile imports. Trade associations from Bangladesh are insisting the Government to negotiate with Turkey to withdraw the same, or minimize it by 10%. An 18% customs duty is imposed on denims of Pakistan increasing to total rates to 24.5%.


A number of products exporter from Indonesia will have obligatory trade barriers, making them uncompetitive in the Turkish markets as additional duties end up pushing the price of the merchandise. For imports from Indonesia, an anti-dumping duty of 6-12% is enforced on unprocessed synthetic staple fibres, and for woven fabrics, and apparels, the duty ranges from 18-27%.


Business Record reports Mirza Ikhtiar Baig, advisor to Pakistans textile ministry saying, "Pakistan faces a loss of US$200 million. Our exports of fabric to Turkey are worth $380 million while the total volume of trade between Turkey and Pakistan is $940 million ". The importers will also pay provisional customs tariffs.


The imposed duties will last for four full years, provided, the WTO does not interfere. Rates approved by the Ministry are 10% lower that that proposed by the under-secretariat of foreign trade (UFT). However, the imposed duties are on a conditional basis until September. At the end of the nine months investigation in September, if the UFT decides that no safeguard measures are required, the tariffs collected so far would also be returned in full. Debates are also going on stating that these import duties are laid by the Government to boost its popularity during the election period, and will be waived of after the general elections by June.

Exporters from other countries are under the urge to ship their products as early as possible, and before July to avoid payment of additional duties. As the added tax on the basic materials will affect the market prices, foreign exporters fear a slash in the domestic demand for their products.


Turkish importers are also annoyed with this declaration. Though the new tariffs are brought only to encourage the domestic industry, there are certain fabrics which are not manufactured in Turkey, and needs to be imported. The country is dependent on some products such as silk and cashmere. They fear that the new tariff might result in a 20% increase of domestic textile, and apparel prices for the coming season.

The Hurriyet daily news reports Tarık Bozbey, head of the Mediterranean Exporters Union saying, "tax rate applied on textile imports is about 10 percent, but the figure is likely to be raised to 40 percent around the summer. Products or raw materials that are not sufficient in the domestic market or not manufactured at all should be exempt from taxation, while tax hikes for the rest of the products should be implemented gradually ".


Turkey has skilled workforce, technology, and design capabilities. Textile and apparel sector of the country contributes to 8% of the countrys GDP, and 20% of industrial production. It is a value added manufacturing base making its mark as a potential fashion centre. Current safeguard measures are likely to affect all countries, except those who have duty free access with Turkey. This will affect the clothing exports of Asian countries, while the textile and apparel sector of Turkey will see a dramatic decline.


References:


1.      Hurriyetdailynews.com

2.      Atimes.com

3.      Data source: thaitextile.org

Image Courtesy:


1.      us.123rf.com

2.      turkishculture.org

3.      algeria.com