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Morocco:Textile industry under threat due to Chinese imports |
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2005-1-5
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After the abolition of Multifibre Agreements (MFA), Morocco’s textile industry is under menace of ''Made in China''. The end of Multifibre Accords on January 1, 2005 heralded painful news for Morocco’s crisis-stricken textile industry.
The general secretary of the Moroccan Association of the Textile and Clothing Industry, Karim Tazi in an interview with press reports said the competition from China and India could mean ‘Morocco risks losing between 30 and 40 percent of the European market within three years’ and was ‘a(chǎn)n upheaval, a real earthquake’.
He warned that ‘this will force textile firms to close down,’ adding the loss in export gains could reach even 50 percent in the worst scenario.
Tens of thousands of jobs are threatened in the North African kingdom with subcontracting firms seen as the most affected by ‘Made in China,’ after the abolition of textile quotas.
For decades, industrialized nations have gained quotas on textile imports to save their producers from foreign competition. The World Trade Organization started phasing out the quotas in 1995.
However, from January 1, 2005, a huge hike in Chinese and Indian exports, accompanied by a general fall in price, will certainly effect textile exporters of developing country Bangladesh, Morocco and Mauritius.
Morocco is also facing with another problem. Besides Asian competition, textile professionals in the kingdom have expressed fears of competition from the United States in the wake of a free trade agreement reached between Rabat and Washington in June 2004.
The agreement specifies that textile and clothing imports may be exempt from customs duty, if they respect rules of origin aimed at promoting the use of fibres and fabric made in the US and Morocco.
A WTO study last year estimated that removing the quotas would raise China''s share of US clothing imports to about 50 percent from 16 percent in 1995 and China''s share of European Union imports to 29 percent from 18 percent.
Morocco can only hope ties with EU partners that will help to stay away from competition with Chinese products. Yet, the kingdom will have to focus in niche markets to develop new lines concentrating on top quality products to keep textile industry up and running.
However, retailers around the world will be the main beneficiaries of lower wholesale prices and higher margins.
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