JEDDAH, 12 May 2004 — UNCTAD is ready to help countries in the Organization of the Islamic Conference buffer the impact of the international textiles and clothing trade liberalization kicking in next year.
On Jan. 1, 2005, the WTO Agreement on Textiles and Clothing (ATC) ends, and with it a quota system favoring developing nations including many members of the OIC.
Concluding here yesterday, a two-day meeting at the headquarters of the Islamic Development Bank was convened to formulate a common OIC policy on the issue.
It was attended by 34 representatives of OIC textiles and clothing countries and other international bodies.
“The next several years will be an important period to monitor the effect” of the lifting of the ATC, “and I am proposing to establish a collaboration project with the IDB to identify specific measures to first find out what steps are necessary to help affected workers,” said Michiko Hayashi, the economic affairs officer of UNCTAD’s division for international trade in goods, services, and commodities.
“If they lose jobs they have to be helped to find new jobs to adjust and also to enhance supply side capacity to improve competitiveness,” she said. “So we propose that UNCTAD and IDB collaborate to help OIC countries.”
After “some adjustments” trade liberalization would bring “more opportunity to grow and the textile and clothing sector to contribute to development,” she added.
In her presentation Hayashi said the textiles and clothing sector played a crucial socio-economic role in diversification away from traditional commodity exports, absorbing large pools of manpower, and alleviating poverty in OIC countries
Exports of textiles and clothing from OIC countries made up 10 percent and 15 percent in the world market in 2002, with clothing accounting for a massive 70 percent of their exports. The growth rate between 1990 and 2002 for textile exports was 114 percent, and for clothing 174 percent.
Hatyashi urged in-depth studies for OIC countries addressing post-ATC issues “in the developmental perspective,” and it was here that IDB and UNCTAD could usefully work together.
With the ATC framework gone, she warned, the industry will be increasingly regulated by private codes of conduct, and little would stand in the way of “rigorous labor conditions” — or sweatshops and other abuses of workers.
“At present there is no effective mechanism to address this problem in the international organizations, and relevant institutions such as International Labor Organization and UNCTAD should monitor developments on private codes of conducts,” she said. Hayashi held out little hope that pressure to delay the lifting of the agreement could succeed.