NEW YORK — The head of the world’s largest apparel and textile trade union told world economic leaders that if Chinese competition is left unchecked, the end of quotas in 2005 could have disastrous results for many countries, at a cost of millions of jobs.
This story first appeared in the January 27, 2004 issue of WWD. Subscribe Today.
“China is wiping the board and threatening to destroy the economies of more than a dozen poor textiles-dependent countries,” said Neal Kearney, general secretary of the International Textile, Garment & Leather Workers’ Federation, at a meeting of the World Economic Forum in Davos, Switzerland on Friday. “As a consequence, more than a million job losses are projected for Bangladesh — a figure backed up by [the United Nations Development Program]. A further one million jobs are likely to disappear in Indonesia, 250,000 in Sri Lanka and millions more in every corner of the world from Guatemala to Lesotho. Hundreds of factories have already closed in Mexico.”
The nations of the World Trade Organization are set to drop their quotas on textiles and apparel on Jan. 1. That event is expected to cause a shift of a significant portion of world apparel and textile production to China, which has been building factories at a furious rate in anticipation.
Kearney called on officials at the WTO to undertake a study of the effect this will have on developing economies around the world. The ITGLWF is an association of 220 unions with a combined membership of about 10 million.
According to an ITGLWF statement, Kearney said China’s “brazen disrespect for the application of core labor standards is now seriously disrupting world trade in textiles and clothing.”
He noted that China’s share of the U.S. apparel market has been growing rapidly. According to Commerce Department data, U.S. imports of Chinese garments and fabric rose 36.7 percent as measured in dollars for the year ended November 2003. That greatly exceeded the net import growth of 8.8 percent, meaning that China is rapidly taking market share from other countries.
He also noted that in Japan, which does not use quotas to regulate apparel imports, China holds more than 90 percent market share in many categories.
“Major brand names and multinational retailers have begun to switch orders to China in anticipation of the removal of trade restraints in 2005,” he said.