GENEVA — The president of the World Bank, James Wolfensohn, brushed aside doom-and-gloom projections on Tuesday that apparel industries in small apparel-exporting nations will be wiped out by the intense competition of the post-quota environment.
He acknowledged that some countries will feel economic pain as a result of the phaseout of import limits among the members of the World Trade Organization, but argued that economies will adapt.
“I’ve just been to Cambodia, where there has been a lot of work in the clothing industry and what has happened there is you have had a transformation in the competitiveness of the industry to try and compete in the nonquota environment,” Wolfensohn told reporters. “What I have learned in the last couple of weeks is that there is a predisposition on the part of manufacturers to try and make these nonquota countries more competitive, provided they can meet international competitive standards.”
Last year, apparel executives from 50 countries banded together to try to forestall the elimination of quotas, saying that 30 million jobs worldwide would be put at risk. Those executives said China and India would swiftly grow to dominate the trade, dealing a severe blow to the economies of nations that depend on apparel exports.
WTO officials, meanwhile, have acknowledged that some suffering will result from the change. But they have asserted that the burden of helping countries adapt should be borne by global financial institutions such as the World Bank and International Monetary Fund, rather than the WTO.
Wolfensohn said he saw a strong desire on the part of Cambodian manufacturers to adapt to the change.
“I don’t think they’re all throwing up their hands and saying, ‘Because of the [end of] quotas, we’re finished,’” he said. “The impression I got was that they were saying ‘it’s a new set of conditions and we’ve got to compete.’”
In 2003, Cambodia’s exports of apparel reached $1.5 billion, up from $1 billion a year earlier, and accounted for a 75 percent share of its total merchandise exports, WTO data shows.
Meanwhile, the U.N. Economic Commission for Europe published a survey Tuesday asserting that the end of quotas could take a toll on apparel makers in Turkey, Bulgaria and Romania. It said those countries would have a hard time attracting new investment from abroad to modernize their industries now that quotas have been lifted.
The report projected that the elimination of quotas could cost Turkey 1 to 3 percent of its market share in the European Union and may reduce its export earnings by 2.2 percent. In 2003, the most current data available, Turkey shipped $10.8 billion worth of apparel and textiles to the EU, giving it a 7 percent share of that market.
In 2003, Turkey was ranked the world’s fourth-largest exporter of apparel with shipments valued at $9.9 billion, which represented a 21.3 percent share of its total merchandise exports, according to WTO data. Turkish executives helped lead the bid to extend quotas.