Fifteen poor states seek US garment preferences
By Edward Alden in Washington
Published: May 3 2005 17:47 / Last updated: May 3 2005 17:47
A coalition of 15 of the world's poorest developing countries is lobbying the US Congress for a new scheme that would give them trade preferences to offset the advantages gained by China and India since the lifting of quotas on textiles and apparel.
The countries which include Bangladesh, Afghanistan, Cambodia and Nepal say they are facing a severe disadvantage selling into the US market, not only against larger competitors but against smaller African and Latin American nations that enjoy duty-free access for many garment exports. Fourteen of the 15 countries are considered “least developed” by the United Nations, while the other, Sri Lanka, was badly hurt by last December's tsunami.
“We don't have the resources to compete with the big players around us,” said Muhammad Yunus, founder of Bangladesh's Grameen Bank, during a visit to Washington last week to push for the legislation.
He said if the current situation were left unchanged, Bangladesh could find itself losing an industry that the World Bank estimates has pulled nearly 2m families about 13 per cent of the country's poor households out of poverty.
“What will we do with the 1.5m young girls who work in the garment industry?” he said. “If that industry gets threatened, then our society gets threatened.”
The effort to pass a new trade preferences bill, which enjoys some bipartisan support in both houses of Congress and backing from multinational companies such as Nike, nonetheless faces difficult political hurdles.
The US has offered new preference programmes to Africa and the Caribbean over the past decade, but each of those bills took several years to build sufficient congressional support to overcome opposition from domestic textile interests.
Bangladesh and the other countries pressing for the new bill fear they do not have that much time.
Annisul Huq, of the Bangladesh Garment Manufacturers and Exporters Association, said the industry there had not yet been seriously hurt by the end of quotas because many buyers were reluctant to shift too much sourcing to China due to fears the US and Europe would reimpose quotas.
“But in the longer run we are pretty sure that, unless we get a level playing field, this industry will be seriously hurt,” he said.
Clothing accounts for about 80 per cent of Bangladesh's exports, with 40 per cent of that going to the US.
Many of its apparel products already enjoy duty-free access in the European Union as part of the 2001 Everything But Arms Initiative, leading to a 19 per cent rise in exports since 2001 that has made it the fourth largest garment exporter to Europe. Bangladesh's garment exports to the US fell 6 per cent in the same period.
Critics say the expansion of preference programmes has done little to help developing countries, with each new scheme eroding the preferences of poor countries that already enjoy them and further hurting those countries without such benefits.
Jagdish Bhagwati, a Columbia University economist, has warned that granting such preferences simply “sets off poor nations against other poor nations”.
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