FTA & other factors to reduce textile export gains: ADB
15 Apr '06
2 min read
Free Trade Agreements (FTA) between the US and Pakistan's competitors in clothing exports and admission of 10 East European countries in the EU, may affect Pakistan's gains in exports, cautioned the Asian Development Bank (ADB).
Pakistan's textile and clothing exports to the EU is at a disadvantage due to imposition of antidumping duties on imports of bed linen and losing preferential access to the EU under Generalized System of Preferences (GSP).
Pakistan has also lost competitive edge in international textile and clothing export market on account of high business costs and low labour productivity.
Bangladesh, Sri Lanka, and Vietnam continue to enjoy GSP concession which further hurts Pakistan's exports.
The EU's decision to reduce antidumping duty will help in raising exports of bed linen.
The ADB in its Asian Development Outlook 2006 has held that elimination of quotas on textile and clothing exports under World Trade Organization agreements has far-reaching implications for economy.
Textile and clothing account for more than two-thirds of total exports, approximately 10 percent of value added in gross domestic product, and almost 40 percent of industrial employment, the opening of the global textile market will have major effect on Pakistan's exports and the economy.
Policy of free trade in cotton, liberal import policy for textile machinery, other inputs and gradual deregulation of investment-approval procedures were the major factors in modernization of Pakistan's textile sector for the past few years.
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