Textile export quotas abolition hurts developing countries

01 Aug '05

2 min read

The rules that curbed exports of textiles and clothing from poor countries to the rich world for more than 40 years ended on December 31st.

Many developing countries lost out as free competition replaced quotas while some like India and China basked in the glow of free competition. Though China has been the major beneficiary of the free-for-all trade, India, which employs nearly 35 million textile workers, has also seen its textile exports surging by nearly 25 percent.

The textile and clothing sector is India's largest employer after agriculture, and accounts for nearly four percent of the country's GDP.

Nearly 12 billion rupees have been invested in capacity enhancement and up-gradation. The Indian government has set an ambitious target of boosting textile exports to 50 billion dollars a year by 2010 from about 11 billion now.

In Bangladesh, some 3,500 garment factories employ 1.8 million workers, and bring in 75 percent of the country's export earnings. President of the Bangladesh Garment Manufacturers and Exporters Association said he feared a third of smaller factories would go bust, throwing 200,000 to 300,000 people out of work.

Even though the competition has substantially slashed prices for western consumers, it has spelt economic disaster for countries like Bangladesh that had used the guaranteed access that quotas provided to build up huge garment industries and are now being forced to shut them.

Republic of Maldives