GENEVA — The best way for small exporting nations to maintain or grow market share in the face of huge competitors, such as China and India, is to specialize, especially in light of the end of the global quota regime for apparel and textiles.

Huma Fakhar, a Lahore, Pakistan-based consultant who was part of a panel of experts at a recent forum sponsored by the U.N. Conference on Trade and Development, said China and India will be the two big winners among World Trade Organization members, but he dismissed the notion that they would wipe out their competition.

Rather, he argued, the lifting of restraints will allow smaller nations new opportunities.

“This is likely to be the biggest opportunity for developing countries to look beyond the wall of quotas and diversify into new markets and products,” Fakhar said.

He said the dynamic products would vary from country to country and from market to market.

China, he noted, will initially have an edge on synthetic fiber and cotton garments, while India’s advantage will be in cotton garments, particularly shirts and pants that require intricate stitching. Pakistan, he said, also has an edge in cotton.

He suggested that Sri Lanka’s strength will remain in intimate apparel manufacturing, an area where skilled needlework is key. Bangladesh, he said, will remain strong in cotton and synthetics, but is gaining ground in wool. Mexico’s forte will be cotton sweaters, as well as men’s wool suits and shirts, he added.

As for the U.S. textile industry, Patrick Conway, of the economics department at the University of North Carolina, said commodity textiles will be a winner-take-all competition based on price and reliability, where U.S. producers are likely to “cede production to foreign suppliers.”

He said the best bet for U.S. mills will be to focus on high-tech fabrics such as nonwoven textiles and to seek out international partnerships for more basic goods.

Munir Ahmad, executive director at the International Textiles and Clothing Bureau, an umbrella organization for developing countries, noted that even with quotas lifted, the competitive playing field remains tilted by trade deals that apply duties selectively.

This story first appeared in the February 22, 2005 issue of WWD. Subscribe Today.

For instance, he noted that Jordan and the countries of sub-Saharan Africa continue to get duty-free access to the U.S. for apparel made of third-country fabric. At the same time, Mexico and the nations of Caribbean and Central America — also parties to preferential trade deals — are required to use locally produced textiles to get duty-free benefits.

He said action on rules of origin is critical if all poor countries are to benefit from the end of quotas.

The Fiber Price Sheet
The last Tuesday of every month, WWD publishes the current, month-ago and year-ago fiber prices. Prices listed reflect the cost of one pound of fiber or, in the case of crude oil, one barrel.
Fiber Price on 2/25/05* Price on 1/25/05* Price on 2/23/04*
Cotton 48.23 cents 46.44 cents 75.21 cents
Wool $2.57 $2.58 $2.76
Polyester staple 66 cents 66 cents 57 cents
Polyester filament 76 cents 76 cents 56 cents
January Synthetic PPI 108.2 107.9 105.4
Crude Oil $47.54 $48.53 $34.26
*The current cotton price is the January average on fiber being delivered to southeastern region mills, according to Agricultural Marketing Services/USDA. The wool price is based on the average price for the week ended Feb. 18 of 11 different thicknesses of fiber, ranging from 15 microns to 30 microns, according to The Woolmark Co. The consulting firm DeWitt & Co. provides the information on polyester pricing. The Bureau of Labor Statistics compiles the synthetic-fiber producer index, or PPI, which reflects the overall change in all synthetic-fiber prices. The PPI is not a price in dollars but a measurement of how prices have changed since 1982, which had a PPI of 100. Oil prices reflect the Feb. 17 closing price on the New York Mercantile Exchange of future contracts for light, sweet crude oil to be delivered next month.