The majority said they expected either positive (33%) or no effect at all (25%). However, those who believed it would have negative impact still constituted a fairly large group 42%).
Effects of FTAs on Textile and Garments Industry
The FTAs that are currently being negotiated by UAE with some of its major trading partners are expected to introduce changes in the industry. The survey highlighted varying expectations for the effects of FTA by country. A very high positive expectation was expected for the FTA with US (91%) and none expected negative effects.
On the other hand, FTA with China is perceived to be the least favorable with only 30% saying it would have positive effect, while 20% expected negative effects, for a net score of 10%. Those who expected no effect accounted for 50% of the manufacturers surveyed.
Included among countries for which FTA are expected to be either favorable or would have no adverse effects were EU, Australia and Singapore. On the other hand, although majority expected either favorable or no effect for an FTA with Malaysia, India and Pakistan, 18%, 20% and 27%, respectively, believed there would be negative effects.
The above results show that 91 per cent expect that an FTA with US will have positive effect on their business and only 9 per cent expect that it will not affect them.
Those who believe that FTAs with China, India, Malaysia, and Pakistan will have negative effects may be considering the fact that these countries are major exporters of textile and garments. In addition, they have the advantages of the availability of the raw materials and cheap labor, giving then an edge over Dubai
manufacturers.
Nonetheless, majority of Dubai textile and garments manufacturers maintain bright prospects for the future of the market under the FTAs, with 79% of them expressing this.
Economic Bulletin, Dubai Chambers of Commerce & Industry