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Chinese textile exports to be boosted by half

"There is no doubt that India and China will increase their world market share substantially in the textiles and clothing sector."

Hildegunn Kyvik Nordas, author ofa WTO report

China will boost its global clothing and textile exports by as much as half while Mexico and Morocco may hold onto their market shares when quota limits expire next year, a WTO report says.

Quotas on textile and clothing exports, used by the US and EU for four decades to protect domestic producers such as Greensboro, North Carolina-based International Textile Group and France's Dollfus-Mieg & Cie SA, will be abolished next year under a WTO agreement dating from 1994.

That will mostly benefit China, already the world's biggest exporter, which sold US$42 billion worth of textile and clothing in 2002, as well as India, the report says. Changes in the spending habits of consumers, who buy more clothing more often, mean demand from countries close to US and EU markets, including Morocco and Mexico, won't decline.

"There is no doubt that India and China will increase their world market share substantially in the textiles and clothing sector," says the report by Hildegunn Kyvik Nordas, a researcher at the WTO.

The report anticipates that "China triples its market share while India's market share is quadrupled."

Once quotas end, US clothing imports from China will leap to 50 percent from 16 percent in 2002, the report says, while imports from India will jump to 15 percent from 4 percent.

"The expected surge in market share may be less than anticipated, as proximity to major markets assumes increasing economic significance" and other developing countries catch up with Chinese labor costs, the report says. "Time to market is important and increasingly so."

That means nations near their export markets "are likely to be less affected by competition from India and China."

That may not help poor producing nations that are far from industrialized markets.

Nordas's outlook is also more optimistic than some over job losses. The Washington-based National Council of Textile Organizations estimates that countries such as Mexico, Turkey and Sri Lanka will lose US$200 billion in exports to China and 30 million workers in Canada, Germany, Taiwan and elsewhere will be left jobless.

WTO members will keep recourse to protection provided they can prove that a surge in imports is undermining their own industry.
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