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Textiles & clothing trade developments in 2006 - WTO reports

Apr '07
In the second year after the phasing out of the Agreement on Textiles and Clothing, the structural changes in world trade of textiles and clothing continued unabatedly. Exporters from developed countries and those from advanced developing economies in East Asia are losing market share, together with major developing suppliers in Central America and the Mediterranean region, which process textiles originating from developed countries.

China's exports continued to gain market share in all major developed import markets despite restrictions introduced in 2005. Some smaller suppliers expanded their textiles and clothing exports even faster than China and the share of least-developed countries in imports of the United States and the European Union increased sharply in 2006.

The annual expansion rate of textiles and clothing imports from China into Canada, the United States and the EU was roughly halved between 2005 and 2006 in each of these three markets. The combined textiles imports of the three economies from China rose by 41% in 2005 and is estimated to have increased by 15% in 2006. Despite the sharp deceleration this rate is still about twice the rate of imports from all sources (with EU intra-trade excluded).

These import developments suggest that the introduction of quotas in the United States and the EU in the course of 2005 had a restrictive effect on textiles imports from China. On the other hand, the deceleration in textiles exports from China to Canada was about the same as to the United States in the absence of any new quotas. The new restrictions also had no apparent effect on China's overall exports of textiles and clothing to the world, which increased in 2006 by one quarter — somewhat faster than in 2005 (21%).

Imports of textiles and clothing of the four major developed markets (incl. Japan) are estimated to have increased by 5.5%, to about $350 billion in 2006. This increase was slightly faster than in the preceding year despite the deceleration in US import growth, to less than 4%. In contrast to the moderate overall import growth, intra-NAFTA textiles (and clothing) trade was declining and that of intra-EU(25) stagnated in 2006.

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