This should be a big help economically to Pakistan and Pakistan’s textile industry. Textile quotas have always been an issue between Pakistani gov’t and U.S.
http://www.nytimes.com/2004/12/17/opinion/17fri1.html?oref=login
At 12:01 a.m. on Jan. 1, ships laden with cotton underwear, khaki slacks and cashmere sweaters will leave the port of Hong Kong. Their destination will be the Gap, Printemps, Wal-Mart and a slew of other retail stores, eventually ending up in closets from Paris to Peoria.
These textile and apparel exports will be the first to head to America and Europe in a brand-new post-quota world, envisioned some 10 years ago when the World Trade Organization ordered that clothing import quotas be abolished by 2005. In theoretical terms, that means that China, Indonesia, Pakistan and other countries that produce textiles and apparel can ship as much as they want to the United States.
The end of textile quotas presents a textbook opportunity to realize the benefits of free trade. If companies like the Limited and Banana Republic can buy specific clothing items from the cheapest and most efficient producer, no matter where that producer happens to reside, then American consumers - who have borne part of the cost of protecting the nation’s textile industry - should see a sharp reduction in the price of clothing.
The quota elimination should also benefit workers in developing countries that have seen their growth potential limited because they couldn’t sell as many pairs of trousers to the United States as they could make. Until now, developing countries that had competitive textile industries - like China, India, Turkey and Indonesia - were cut off at the knees right when those industries started to grow.
Of course, trade doesn’t exist in just a theoretical world. In real life, United States textile interests, seeking to protect their dying industry, have persuaded American trade officials to negotiate “surge protections” into the agreement. So if clothing imports - from China, specifically - surge, the Americans can close the door again.
The United States government has already put the kibosh on imports of Chinese bras because domestic manufacturers complained that those imports were growing too fast.
And the old system did have some advantages for poor countries. Once a nation like China, India or Indonesia developed a competitive textile industry that generated enough exports to bump into the quotas, the big retailers just moved on, creating new opportunities elsewhere. That’s how Cambodia was able to jump on the textile wagon.
Some of those places are unlikely to do well in a Darwinian competition for the survival of the fittest. Fiji and the Maldives, beautiful sets of atolls both, will lose, because retailers will no longer need to stretch all the way to the Pacific and Indian Ocean islands for items they can get at a lower cost in China. Some budding textile countries in Africa, like Madagascar, Botswana and Lesotho, may lose as well.
Both the Bush administration and politicians on both sides of the aisle in Congress, who will undoubtedly contort themselves into pretzels to protect America’s politically powerful textile manufacturers, must spend some of their political capital protecting some of the countries that lose out as well. It would not be difficult to do: the United States could eliminate duties on textiles coming from some of these countries. Such a step would give these countries the small edge they need to continue luring retailers.
Domestically, the White House and Congress should aggressively finance and, more important, manage, America’s neglected Trade Adjustment Assistance program, which seeks to provide re-training to American workers whose jobs migrate overseas because of free-trade deals. Finally, American textile companies would do better by spending less time whining to Capitol Hill to protect them from foreign competition and more time restructuring their industry to take better advantage of globalization.
There are still some items that Americans make best, like wall-to-wall carpets, automotive fabrics and the permeable synthetics called geotextiles. And working in tandem with factories in China on products that are finished over here can help America’s healthy textile companies.
Gone are the days when President John Kennedy, seeking to coddle New England knitting mills in Fall River, Woonsocket and New Bedford, first introduced the world to the quota program that has severely limited American imports of clothing from other countries. It’s a new world order now, where Thailand and Turkey will compete furiously to reduce costs and eliminate unnecessary red tape, all so they can be the ones awarded the contract to run up your next pair of jeans. Let’s pull up the anchors; it’s time for those ships to sail.