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Import surges from China took a toll on the domestic textile industry, which lost 47,700 jobs for the year ended Sept. 30, 2003, according to a coalition of textile and fiber groups. Domestic groups claim that if China goes unchecked, the remaining 437,700 textile jobs could disappear over the next several years, particularly in light of 2005, when all quotas among the 146 World Trade Organization member nations will be removed. On the flip side, importers, retailers and apparel manufacturers faced some challenges during the past year when SARS and the war in the Middle East impacted sourcing decisions. Meanwhile, the Bush administration hopes to energize the international market with initiatives like the Central American Free Trade Agreement.

1) PEOPLE’S REPUBLIC OF CHINA
Year ending October 2003: 7.8 billion SME
Year-end change: 82.5 percent
In 2005, the World Trade Organization will drop quotas on textiles and apparel, which is expected to make China an even more formidable threat. The country recently surpassed Mexico as the top foreign apparel supplier to the U.S. It was already the top textile supplier.

2) MEXICO
Year ending October 2003: 4 billion SME
Year-end change: -8.7 percent
As China surges ahead in the textile and apparel import market, Mexico is falling behind and losing market share. NAFTA celebrates its 10th anniversary this year, but its impact on trade is unclear. The treaty cemented bonds between Mexico and the U.S., but Mexico’s rising standard of living has raised production costs.

3) CANADA
Year ending October 2003: 3.3 billion SME
Year-end change: -0.8 percent
Originally there was significant public opposition to NAFTA in Canada, but today the measure is seen as a success. U.S.–Canada trade comes to $1.7 billion a day across all categories, and one in four jobs in Canada are believed to be linked to NAFTA.

4) PAKISTAN
Year ending October 2003: 2.6 billion SME
Year-end change: 4.6 percent
In exchange for its support on the war against terror, Pakistan received a three-year package of increases on apparel and textile quotas from the U.S. in 2002, though as of 2004, further trade breaks from the U.S. seem unlikely. Pakistan is seen as one of the handful of countries that will be able to hold its own against China when quotas are dropped in 2005.

This story first appeared in the January 8, 2004 issue of WWD. Subscribe Today.

5) SOUTH KOREA
Year ending October 2003: 2.1 billion SME
Year-end change: 12 percent
Once Korea’s top export, textiles now rank fourth. In an effort to remain competitive, some 206 South Korean manufacturers are exploring options in Kaeson Industrial Park, currently under construction in North Korea, even as Korea’s Federation of Textile Industries is pushing its producers to move away from cheap labor.

6) INDIA
Year ending October 2003: 1.7 billion SME
Year-end change: 12 percent
Though the WTO is maintaining developing country status for India, a U.N. study released in 2003 predicts that the end of textiles and clothing quotas in 2005 will likely bring a surge in business for Indian apparel makers as well as for the Chinese. In the year ended October 2003, India boasted a staggering 135 percent increase in its wool dresses category.

7) TAIWAN
Year ending October 2003: 1.4 billion SME
Year-end change: 3.5 percent
Chinese competition is a major concern for the Taiwan Textile Federation. While China’s import growth is concentrated in product categories no longer restricted by quotas, primarily in nonapparel categories, Taiwan saw double-digit losses in these same categories for August 2003.

8) * HONDURAS
Year ending October 2003: 1.2 billion SME
Year-end change: 9.6 percent
In 2003, the U.S. negotiated the Central America Free Trade Agreement, a regional free trade agreement with five Central American countries, including Honduras. The trade bloc would be critical strategically for domestic textile and retailer and importer groups.

9)* INDONESIA
Year ending October 2003: 1.2 billion SME
Year-end change: -1.7 percent
Increased wages, a drop in foreign direct investment in Indonesia’s textile sector due to political instability, and strong competition from China are posing problems for Indonesia, which experienced a 1.7 percent decrease in its U.S. exports for the year ended October 2003. Along with much of the rest of the world, Indonesia has been losing ground to China in recent years.

10) THAILAND
Year ending October 2003: 1.1 billion SME
Year-end change: -12.2 percent
Thailand is expected to be added to the roster of countries with which the Bush administration aims to negotiate a free trade agreement. Though it is unclear when talks will begin, an agreement would certainly help Thailand recover from a difficult 2003, when it suffered a 12.2 percent decrease in textile and apparel exports to the U.S.

SOURCES: WWD AND THE COMMERCE DEPARTMENT’S OFFICE OF TEXTILES AND APPAREL; * indicates a tie