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