The 148 nations of the World Trade Organization removed quotas on apparel and textiles on Jan. 1 and the major issue remains whether China will dominate the industry. U.S. importers and retailers have said they will consolidate sourcing in fewer countries. One dire prediction from the International Confederation of Free Trade Unions sees the 50 countries involved in the textile and apparel manufacturing sector dwindling to seven by 2007. China continues to increase its share of the U.S. import market, squeezing other foreign suppliers. A handful of countries, however, such as India, Pakistan and South Korea, posted significant growth in imports to the U.S. last year and are expected to stay competitive in a post-quota world.

  1. CHINA
    Year-to-date ended Nov. 30: 10.7 billion SME; Year-to-date change: 43.1 percent;
    Year-end share of U.S. import market: 24.8 percent

    China posted import gains as high as 1,000 percent, dominating nonquota categories such as quilts, tablecloths and infants’ wear. To alleviate concerns about its power, China levied a small tax on 148 export categories. Meanwhile, U.S. importers sued the government over its authority to impose China safeguards or temporary quotas. A federal district court judge issued a temporary restraining order barring the U.S. government from accepting or reviewing domestic safeguard petitions. The Justice Department said it will appeal the injunction.

    Year-to-date ended Nov. 30: 3.6 billion SME; Year-to-date change: 4.6 percent;
    Year-end share of U.S. import market: 8.8 percent

    Mexico has been losing U.S. import share since 2002. It isn’t clear whether the country will enjoy a trade advantage over China with the duty preferences it receives in the North American Free Trade Agreement and its proximity to the U.S. Mexico had a big increase in exports of non-woven fabric, a comeback in man-made fiber bags and a significant increase in quilts, comforters and curtains in 2004.

    Year-to-date ended Nov. 30: 3.08 billion SME; Year-to-date change: -1.7 percent;
    Year-end share of U.S. import market: 7 percent

    Canada had big increases in exports of nonwoven fabric and combed cotton yarn, but lost a significant portion of knit fabric exports. Canada is another unknown in the sourcing picture, although many observers claim it could maintain a competitive advantage against China due to investments in cutting-edge technologies, NAFTA benefits and proximity.
    Year-to-date ended Nov. 30: 2.4 billion SME; Year-to-date change: 11.2 percent;
    Year-end share of U.S. import market: 6.4 percent

    Pakistan proved last year that it can compete with China in nonquota categories, particularly in bedspreads and carded and combed cotton yarn, which increased significantly. Pakistan also increased its exports of cotton sheets, which were under quota last year. Pakistan is listed as a winner in most studies of the post-quota environment. The country has always been a major yarn and fabric producer, especially of cotton, and it has invested heavily in its spinning capacity. It is focused on vertical production, which many experts say is a key to survival.

    Year-to-date ended Nov. 30: 1.9 billion SME; Year-to-date change: 11.3 percent;
    Year-end share of U.S. import market: 5 percent

    South Korea was a strong front-runner last year as it competed against China in many categories no longer under quota. It posted big export increases in nontextured filament yarn, knit fabric shawls, scarves and mufflers. It also had increases in man-made fiber sweaters and woven shirts, which were under quota. Wages and costs in garment factories have risen along with the country’s developing economy, and manufacturers have focused on higher-end, higher-value products. One U.S. government study predicts South Korea will be a major fabric supplier, but lose apparel production.

  6. INDIA
    Year-to-date ended Nov. 30: 1.5 billion SME; Year-to-date change: 15 percent;
    Year-end share of U.S. import market: 4.1 percent

    India and China are most commonly cited as the beneficiaries of a post-quota world. India significantly increased its exports of carpets, tablecloths, napkins, dish towels, luggage, man-made fiber woven bags and cotton robes and dressing gowns — categories that were not under quota last year and where India competed directly with China. The country also increased its exports of cotton sheets, cotton underwear and cotton knit shirts, which were under quota and filled to the limit. Exports are expected to grow significantly, bolstered by India’s large cotton farming industry and high-tech jobs.

    Year-to-date ended Nov. 30: 1.2 billion SME; Year-to-date change: -3.3 percent;
    Year-end share of U.S. import market: 2.8 percent

    Taiwan had significant decreases in exports of knit fabric, man-made fiber furnishings and man-made fiber socks. Taiwan is expected to remain competitive as a “second-tier” supplier, according to a U.S. government study. It will likely increase its share of fabrics but lose apparel production.
    Year-to-date ended Nov. 30: 1.06 billion SME; Year-to-date change: 11.2 percent;
    Year-end share of U.S. import market: 2.7 percent

    Indonesia rebounded last year with big increases in exports of lightweight polyester filament fabric, cotton and man-made fiber underwear, swimwear, woven shirts, man-made fiber trousers and man-made fiber blouses. Indonesia recently gained market share in synthetic-fiber bras, a category where quotas were lifted in 2002 and where the country competed directly with China. Studies vary widely on how Indonesia will compete this year and beyond.

    Year-to-date ended Nov. 30: 1.06 billion SME; Year-to-date change: -4.9 percent;
    Year-end share of U.S. import market: 2.4 percent

    Honduras was a big loser in cotton underwear exports in 2004. The country enjoys preferential benefits, such as duty-free treatment for goods that meet strict rules of origin under the Caribbean Basin Trade Partnership Act. It is expected to gain more business if the controversial Central American Free Trade Agreement wins Congressional approval this year.

    Year-to-date ended Nov. 30: 1.01 billion SME; Year-to-date change: 0.7 percent;
    Year-end share of U.S. import market: 2.3 percent

    Thailand’s apparel and textile shipments to the U.S. have declined slowly over the past few years but many studies claim Thailand will remain competitive, particularly in garments requiring complex construction or detailed sewing. Shipments from Thailand grew only slightly in 2004. Thailand lost significant share in the areas where China’s growth is accelerating at a fast clip. The biggest export losses were in categories such as sheets, pillowcases, napkins, tablecloths, curtains and valences, luggage and man-made fiber woven bags.

    Sources: WWD and the U.S. Department of Commerce’s Office of Textiles and Apparel. * Signifies a tie.

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