GENEVA — The end of quotas will pose an economic hurdle for the world’s poorest nations, with the surge in competition likely to erode already weak labor and environmental protections in the developing world, according to a study by the U.N. Conference on Trade & Development.

The U.N. report said the world’s least-developed countries will feel some pain after the 147 nations of the World Trade Organization drop their quotas on textiles and apparel on Jan. 1. The report named Cambodia, Bangladesh, Laos and Nepal, as well as sub-Saharan African nations including Lesotho, Kenya, Madagascar and Mauritius, as being at greatest risk.

“The international community should be sensitive to their needs and stand ready to extend appropriate assistance,” the report said.

The study also warned there is a risk that “working conditions will deteriorate after the quota elimination as competition intensifies and pressures to cut price would increase.”

It gave little indication of what countries and companies could do to prepare for these problems, but argued against trying to extend the quota system or to replace it with other protectionist measures.

— John Zarocostas

This story first appeared in the October 4, 2004 issue of WWD. Subscribe Today.