LAHORE PAKISTAN SEMINAR 27 MAY

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EXPORT PROMOTION BUREAU LAHORE, PAKISTAN SEMINAR „EXPORT LED GROWTH STRATEGY“: 

EXPORT PROMOTION BUREAU LAHORE, PAKISTAN SEMINAR „EXPORT LED GROWTH STRATEGY“ „ANALYSIS OF THE POST-QUOTA 2004 TEXTILE SCENARIO“ 27 MAY 2003 Keith STUART-SMITH Gherzi Textil Organisation, Zurich, Switzerland

LAHORE, PAKISTAN SEMINAR 27 MAY 2003 EPB EXPORT LED GROWTH STRATEGY ENTER THE BRAVE NEW WORLD : 

LAHORE, PAKISTAN SEMINAR 27 MAY 2003 EPB EXPORT LED GROWTH STRATEGY ENTER THE BRAVE NEW WORLD 31 December 2004 1 January 2005 MULTI FIBRE ARRANGEMENT (- MFA / ATC ) LIBERALIZED TRADE (- WTO / GATT) ESTABLISHED MARKET ENVIRONMENT – 30 YEARS NEW MARKET ENVIRONMENT – ´BRAVE NEW WORLD´

LAHORE, PAKISTAN SEMINAR 27 MAY 2003 EPB EXPORT LED GROWTH STRATEGY MFA to WTO: THE NEW REGIME: 

LAHORE, PAKISTAN SEMINAR 27 MAY 2003 EPB EXPORT LED GROWTH STRATEGY MFA to WTO: THE NEW REGIME 31 December 2004 1 January 2005 MULTI FIBRE ARRANGEMENT (- MFA / ATC ) LIBERALIZED TRADE (- WTO / GATT) QUANTITATIVE QUOTAS IMPORT DUTIES BILATERAL AGREEMENTS RESIDUAL DUTIES REGIONAL TRADE PACTS - RTP FREE TRADE AGREEMENTS -FTA SOCIAL ACCOUNTABILITY LABOUR SAFEGUARDS RETAILERS‘ REQUIREMENTS PREFERRED SUPPLIERS

LAHORE, PAKISTAN - SEMINAR, 27 MAY 2003. EPB EXPORT LED GROWTH STRATEGY CONSEQUENCES OF CHANGE: MFA to WTO : 

LAHORE, PAKISTAN - SEMINAR, 27 MAY 2003. EPB EXPORT LED GROWTH STRATEGY CONSEQUENCES OF CHANGE: MFA to WTO

LAHORE, PAKISTAN SEMINAR – 27 MAY 2003 EPB EXPORT LED GROWTH STRATEGY TEXTILE / GARMENT EXPORTS: 1980 – 2001(US$ bn): 

LAHORE, PAKISTAN SEMINAR – 27 MAY 2003 EPB EXPORT LED GROWTH STRATEGY TEXTILE / GARMENT EXPORTS: 1980 – 2001(US$ bn) Textile & Garment Foreign Trade „stable“ since 1997 Period since 1998 - financial crisis in Far East, recession in several markets- Japan, Germany, Italy Garment exports in majority, expected to grow fastest Textiles, includes yarns, woven and knitted fabrics and home textiles Garments includes woven and knitted garments Source: WTO

LAHOREE, PAKISTAN SEMINAR 27 MAY 2003 EPB EXPORT LED GROWTH STRATEGY TEXTILE IMPORTS and EXPORTS – MAJOR MARKETS (US$ bn): 

LAHOREE, PAKISTAN SEMINAR 27 MAY 2003 EPB EXPORT LED GROWTH STRATEGY TEXTILE IMPORTS and EXPORTS – MAJOR MARKETS (US$ bn) TEXTILE EXPORTS 1990 2001 World 104 147 EU 50.8 50.5 USA 5.0 10.5 China 7.2 16.8 S. Korea 6.1 10.9 Taiwan 6.1 9.9 Turkey 1.4 3.9 Switzerland 2.6 1.4 PAKISTAN 2.7 4.5 India 2.2 6.2 And Indonesia, Japan, Thailand, Canada, etc Source: WTO TEXTILE IMPORTS 1990 2001 World 104 147 EU 50.4 45.6 USA 6.7 15.4 China 5.3 12.6 Mexico 1.0 6.0 S. Korea 1.9 3.1 Canada 2.3 3.8 Morocco 0.4 1.5 Poland 0.3 1.5 Russia - 1.3 And Bangladesh, Sri Lanka, Laos, Lesotho, Madagascar, Mauritius, etc

LAHORE, PAKISTAN SEMINAR 27 MAY 2003 EPB EXPORT LED GROWTH STRATEGY GARMENT IMPORTS and EXPORTS: MAJOR MARKETS (US$ bn) : 

LAHORE, PAKISTAN SEMINAR 27 MAY 2003 EPB EXPORT LED GROWTH STRATEGY GARMENT IMPORTS and EXPORTS: MAJOR MARKETS (US$ bn) GARMENT EXPORTS 1990 2001 World 108.1 195 EU 40.8 47.1 USA 2.6 6.0 Mexico 0.6 8.0 China 9.7 36.7 Hong Kong 9.3 9.3 Turkey 3.3 6.6 PAKISTAN 1.0 2.1 India 2.5 6.5 Bangladesh 0.6 5.1 And Magreb, E. Europe, etc GARMENT IMPORTS 1990 2001 World 108.1 195 EU 56.8 79.3 USA 27.0 66.4 Canada 2.4 3.9 China - 1.3 Hong Kong 0.8 1.9 Japan 8.7 19.1 Switzerland 3.4 3.2 S. Korea 0.2 1.6 Mexico 0.6 3.8 Also Russia, Singapore, Dubai, Norway,etc Source: WTO

LAHORE, PAKISTAN SEMINAR EPB EXPORT LED STRATEGY GROWTH WORLD TEXTILE & GARMENT EXPORTS: 1990–2006 projected (US$ bn): 

LAHORE, PAKISTAN SEMINAR EPB EXPORT LED STRATEGY GROWTH WORLD TEXTILE & GARMENT EXPORTS: 1990–2006 projected (US$ bn) KEY: TEXTILES- yarn, fabrics, home textiles CLOTHING TEXTILE EXPORTS: small increase projected in coming 3 years CLOTHING EXPORTS: growth projected to 2006 as high cost country capacities close Source: WTO, Gherzi

LAHORE, PAKISTAN SEMINAR – 27 MAY 2003 EPB EXPORT LED GROWTH STRATEGY FABRICS BY TYPE: 1980 – 2001(mn tons): 

LAHORE, PAKISTAN SEMINAR – 27 MAY 2003 EPB EXPORT LED GROWTH STRATEGY FABRICS BY TYPE: 1980 – 2001(mn tons) MILL FIBRE USAGE UP 10 X SINCE 1950 KNITTED = WOVEN FABRICS IN 2001 TECHNICAL TEXTILES FAST GROWING SINCE 1990 Source: Gherzi

LAHORE, PAKISTAN SEMINAR 27 MAY 2003 EPB EXPORT LED GROWTH STRATEGY CHANGES IN EU TEXTILE IMPORT SOURCES (US$ bn): 

LAHORE, PAKISTAN SEMINAR 27 MAY 2003 EPB EXPORT LED GROWTH STRATEGY CHANGES IN EU TEXTILE IMPORT SOURCES (US$ bn) Textile imports declined progressively thru‘ the 1990s, as production capacity for fabric/ garments declined Inter EU imports declined Extra EU imports increased their market shares although volume was constant in real terms Source: WTO

LAHORE, PAKISTAN SEMINAR 27 MAY 2003 EPB EXPORT LED GROWTH STRATEGY CHANGES IN EU GARMENT IMPORT SOURCES (US$ bn): 

LAHORE, PAKISTAN SEMINAR 27 MAY 2003 EPB EXPORT LED GROWTH STRATEGY CHANGES IN EU GARMENT IMPORT SOURCES (US$ bn) EU imports fell slightly after 1999 Extra EU imports increased from E. Europe and from Magreb countries Intra EU imports fell Source: WTO

LAHORE, PAKISTAN SEMINAR – 27 MAY 2003 EPB EXPORT LED GROWTH STRATEGY MAJOR GARMENT IMPORTERS HOLD 88% SHARE OF WORLD TRADE (US$ bn) : 

LAHORE, PAKISTAN SEMINAR – 27 MAY 2003 EPB EXPORT LED GROWTH STRATEGY MAJOR GARMENT IMPORTERS HOLD 88% SHARE OF WORLD TRADE (US$ bn) GLOBAL GARMENT IMPORTS % 2001 EU 53 41 USA 25 34 JAPAN 8 10 MEXICO 0.6 2 CANADA 2 2 Total 88.3 88.5 Other countries: Australia, New Zealand, Norway, Russia, Singapore, S. Korea, Switzerland, Taiwan Source: WTO. 2001

LAHORE, PAKISTAN - SEMINAR 27 MAY 2003. EPB POST MFA GROWTH STRATEGY PAKISTAN TEXTILE and GARMENT EXPORTS: 2001 (US$ mn): 

LAHORE, PAKISTAN - SEMINAR 27 MAY 2003. EPB POST MFA GROWTH STRATEGY PAKISTAN TEXTILE and GARMENT EXPORTS: 2001 (US$ mn) PAKISTAN TEXTILE EXPORTS: 2001 Market Total Imports ex % imports Pakistan imports Canada 3811 84 2.2 USA 15429 1057 6.8 EU 32020 995 3.1 Japan 4747 109 2.5 Others 90993 3280 3.6 Total 147000 4525 3.1 72% exports to „others“ markets. This share will probably continue. Markets will be more of the „garment assembly countries“ Home textiles in EU and USA. Source: WTO PAKISTAN GARMENT EXPORTS: 2001 Market Total Imports ex % imports Pakistan imports Canada 3922 70 1.8 USA 66391 1101 1.7 EU 79263 834 1.1 Japan 19148 16 0.1 Others 26276 3280 3.6 Total 195000 2136 1.1 1.1% of garment exports to „others“ markets. Share should grow as WTO member countries open up to garment imports Main markets to continue to dominate. Japan will be a difficult market Source: WTO

LAHORE, PAKISTAN SEMINAR – 27 MAY 2003 EPB EXPORT LED GROWTH STRATEGY COMPETING GARMENT SUPPLIERS: BALUE OF RTP, FTA and FDI: 

LAHORE, PAKISTAN SEMINAR – 27 MAY 2003 EPB EXPORT LED GROWTH STRATEGY COMPETING GARMENT SUPPLIERS: BALUE OF RTP, FTA and FDI ASIA Bangladesh Cambodia, China Hong Kong, India Indonesia, Laos Macau (Malaysia) Philippines (S.Korea), Sri Lanka (Taiwan) Thailand, Vietnam E. EUROPE Hungary Poland Romania Turkey MAGREB Morocco Tunisia CENTRAL AMERICA/ CARIBBEAN Dominican Rep El Salvador Guatemala Honduras (Mexico) Caribbean AGOA 34 Sub-Saharan African countries OTHERS Brazil, Russia, Egypt

LAHORE, PAKISTAN SEMINAR – SEMINAR 27 MAY 2003. EPB EXPORT LED GROWTH STRATEGY REGIONAL TRADE PACTS - IMPACT ON GLOBAL TRADE: 

LAHORE, PAKISTAN SEMINAR – SEMINAR 27 MAY 2003. EPB EXPORT LED GROWTH STRATEGY REGIONAL TRADE PACTS - IMPACT ON GLOBAL TRADE NAFTA Canada, Mexico, USA CARICOM: 14 ANDEAN PACT: 4 countries MERCOSUL: Argentina, Brazil, Paraguay, Uruguay EU 15 W. European countries – 25 plus Associates EFTA 3 countries AFRICAN COMESA, IOC ECOWAS, SACU CEEAC, SADC VISEGRAD. 5 East European countries CIS ASEAN 15 countries APEC- 18 Asia Pacific countries OCE Turkey,Pakistan Iran, +6 CIS SAARC Pakistan India Bangladesh Buthan Sri Lanka Maldives SAPTA

LAHORE, PAKISTAN SEMINAR – 27 MAY 2003 EPB EXPORT LED GROWTH STRATEGY FREE TRADE AGREEMENTS – IMPACT ON GLOBAL TRADE: 

LAHORE, PAKISTAN SEMINAR – 27 MAY 2003 EPB EXPORT LED GROWTH STRATEGY FREE TRADE AGREEMENTS – IMPACT ON GLOBAL TRADE COTONOU: replaced LOMÉ TREATY - ACP countries- duty free/ quota free access to EU AGOA: privileged market access to USA for 34 Sub-Saharan African countries. Country of origin rules ...next slide GSP MARKET ACCESS for LDCS,, e.g. Bangladesh to EU, Canada Bi-lateral Agreements:e.g. EU and Chile, BD and EU Under discussion: ASEAN + China, Japan, Korea Under discussion: India to become Associate member of ASEAN Typically, several Free Trade Pacts are in force; others under discussion, e.g. And others ........

LAHORE, PAKISTAN SEMINAR – 27 MAY 2003 EPB EXPORT LED GROWTH STRATEGY AGOA – RESULTS and ADVANTAGES: 

LAHORE, PAKISTAN SEMINAR – 27 MAY 2003 EPB EXPORT LED GROWTH STRATEGY AGOA – RESULTS and ADVANTAGES GARMENT EXPORTS 2001 (US$ mn) US Total Kenya 64.6 79.0 Lesotho 214.5 215.0 Mauritius 238.2 607.8 Madagascar 178.0 382.0 S. Africa 175.2 174.8 Source: US Statistics ADVANTAGES: Foreign direct investment Export processing zones Competitive labour costs Tax free operations Lomé / Cotonou Agreement (APC) AGOA

LAHORE, PAKISTAN SEMINAR 27 MAY 2003 EPB EXPORT LED GROWTH STRATEGY CONSTRAINTS FACING (MANY) PAKISTAN EXPORTERS: 

LAHORE, PAKISTAN SEMINAR 27 MAY 2003 EPB EXPORT LED GROWTH STRATEGY CONSTRAINTS FACING (MANY) PAKISTAN EXPORTERS

LAHORE, PAKISTAN SEMINAR 27 MAY 2003 EPB EXPORT LED GROWTH STRATEGY AVERAGE EXPORT UNIT PRICE REALIZATION - LOW: 

LAHORE, PAKISTAN SEMINAR 27 MAY 2003 EPB EXPORT LED GROWTH STRATEGY AVERAGE EXPORT UNIT PRICE REALIZATION - LOW Example: UK MARKET- MEN‘S COTTON TROUSERS % market Av. unit price £ All imports 100 5.97 -intra EU 16 11.15 .extra EU 84 4.99 -PAKISTAN 5.8 3.07 -Bangladesh 8.1 4.54 -Sri Lanka 4.4 4.88 -Indonesia 1.9 5.41 -Hong Kong 13.4 5.14 -China 2.5 3.95 Source: UK National Statistics Example: GERMAN MARKET- COTTON T-SHIRTS % market Av. unit price DM All imports 100 5.31 -intra EU 15.5 8.65 -extra EU 84.5 4.69 -PAKISTAN 1.4 3.02 -Turkey 24.4 6.10 -India 3.7 6.04 -Bangladesh 17.8 3.27 -Hong Kong 2.1 7.53 -China 1.4 8.15 Source: German National Statistics

LAHORE, PAKISTAN SEMINAR 27 MAY 2003 EPB EXPORT LED GROWTH STRATEGY TEXTILE and GARMENT EXPORTS: TARGET MARKETS: 

LAHORE, PAKISTAN SEMINAR 27 MAY 2003 EPB EXPORT LED GROWTH STRATEGY TEXTILE and GARMENT EXPORTS: TARGET MARKETS YARNS: China Bangladesh Mauritius Madagascar Vietnam EU (reducing) Mexico Morocco Russia others GREY FABRICS: China Hong Kong Bangladesh Mexico Malaysia Russia Canada Poland Korea others 1. TEXTILES Dyed/Print Fabrics: Garmenting lands - Bangladesh, Laos, Cambodia, Dubai, Bahrain, S. Africa, China, Mauritius, Lesotho, Kenya, Madagascar, Sri Lanka, 2. Furnishings: EU, EFTA, USA, Norway, Australia, Russia, New Zealand, Others HOME TEXTILES: EU/ EFTA USA, Japan Norway Australia New Zealand Russia Others 2003: > US$ 1 bn !!! Bed linen

LAHORE, PAKISTAN SEMINAR 27 MAY 2003 EPB EXPORT LED GROWTH STRATEGY TEXTILE and GARMENT EXPORTS: TARGET MARKETS : 

LAHORE, PAKISTAN SEMINAR 27 MAY 2003 EPB EXPORT LED GROWTH STRATEGY TEXTILE and GARMENT EXPORTS: TARGET MARKETS 2. GARMENTS: TRADITIONAL GARMENT IMPORTING COUNTRIES (HIGHER COST COUNTRIES): EU, EFTA, USA, JAPAN, NORWAY, AUSTRALIA, NEW ZEALAND NEWER GARMENT IMPORTING COUNTRIES: S. KOREA, TAIWAN, MALAYSIA, RUSSIA, CHINA, LOWER COST COUNTRIES / WTO MEMBERS: INDIA, INDONESIA, BANGLADESH, NIGERIA, etc

LAHORE, PAKISTAN SEMINAR – 27 MAY 2003 EPB EXPORT LED GROWTH STRATEGY GOVERNMENT POLICY FRAMEWORK – AREAS TO BE ADDRESSED: 

LAHORE, PAKISTAN SEMINAR – 27 MAY 2003 EPB EXPORT LED GROWTH STRATEGY GOVERNMENT POLICY FRAMEWORK – AREAS TO BE ADDRESSED GOVERNMENT POLICY FRAMEWORK NATIONAL POLICY 5 year/ 1 year plans, Export markets, Domestic market needs, Competitive positioning, Strategies FINANCIAL POLICY Credits, Natioanl Banks, Interest Rates, Inflation, Exchange rates, Sector taxes, Export Financing, FISCAL POLICY Import duties, Production taxes, Sales taxes, Income/ other taxes, Exemptions, Sector taxes, Location taxes, Price support controls INVESTMENT POLICY Incentives, Tax concessions, Promotions, Machines/ spares/ Raw materials, other inputs IMPORT / EXPORT REGIME Import/ Export regimes, MFA/WTO, anti-dumping, reference prices, bilateral agreements, export permits INFRASTRUCTURE Dry/ Wet ports, Containers, Airports, Road and Rail networks, Telecommunications, Power/Gas/Water costs and supplies, Effluent standards, Ecology MAN POWER PLANNING Education, Training, Skills development, Welfare, Labour code, Unions, Language skills RESEARCH DEVELOPMENT Quality control, Productivity, Standarization, ISO, Packaging,

LAHORE, PAKISTAN SEMINAR – 27 MAY 2003 EPB EXPORT LED GROWTH STRATEGY STRATEGIC RECOMMENDATIONS FOR GOVERNMENT: 

LAHORE, PAKISTAN SEMINAR – 27 MAY 2003 EPB EXPORT LED GROWTH STRATEGY STRATEGIC RECOMMENDATIONS FOR GOVERNMENT BILATERAL NEGOTIATIONS with MAJOR and LESSER MARKETS HUMAN RESOURCES DEVELOPMENT – [jointly with Industry] for MANAGEMENT (technical, commercial and general) and TRAINING of TRAINERS – workshops and courses EXPORT TRADE PROMOTION: Assistance for companies to become MARKET ORIENTED – workshops and short courses BUREAUCRATIC PROCEDURES: minimize INTEREST RATES for BMRE and GREEN ISSUES: Consider special rates INFRA-STRUCTURE: Improve

LAHORE, PAKISTAN SEMINAR 27 MAY 2003 EPB EXPORT LED GROWTH STRATEGY STRATEGIC RECOMMENDATIONS: TEXTILE and GARMENT COMPANIES : 

LAHORE, PAKISTAN SEMINAR 27 MAY 2003 EPB EXPORT LED GROWTH STRATEGY STRATEGIC RECOMMENDATIONS: TEXTILE and GARMENT COMPANIES CORPORATE BUSINESS STRATEGIES- formalize on basis of present strengths and weaknesses, opportunities and threats MARKET ORIENTATIONS: Know Buyers personally SELL PRO-ACTIVELY HUMAN RESOURCES DEVELOPMENT: Attain correct commercial, technical and general Management Skills MANAGEMENT INFORMATION SYSTEMS- introduce EFFICIENCIES /PRODUCTIVITY; use Trained Trainers, reduce costs PRICES- increase unit selling prices LEAD TIMES- minimze MARKETS- serve; NEW PRODUCTS- develop (lifeline) QUALITY CONSISTENCY- to specifications SOCIAL ACCOUNTABILITY / LABOUR SAFEGUARDS- match buyers´ needs