PHILIPPINES: Ray of hope for apparel makers

US decision of lifting of the quotas imposed on garments and textile exports has given hope to the apparel makers in Philippines. Companies such as Bench, Penshoppe, Bayo, Kamiseta, Gingersnaps and Folded & Hung face a bright future in the United States once the quota imposed on garments and textile exports is lifted early next year.

Serafin Juliano, executive Director of Garments and Textile Export Board (GTEB) said that opportunities abound for Philippine brands once the quotas imposed by countries such as the United States, Europe and Canada are lifted under the auspices of the World Trade organization (WTO) starting January.

"What the end of the quota will develop for the Philippines is the Philippine brands. Without the quota, Philippine regional brands can now access the US market," Juliano said. The US accounts of about 70 percent of the country's annual garments and textile exports.

The GTEB executive said these Filipino brands are now well-known in different parts of the Asia-Pacific, particularly in Southeast Asian where no quotas are imposed on garments and textile exports.

Juliano said the quota regime is fundamentally a restraint but is also viewed by many as "guaranteed market access."

"It is guaranteed in the sense that you get part of the business but it is a restraint in the sense that you cannot grow beyond the part that is given to you. The quota is a restraint and is a major hurdle to growth," he explained.

In 1995, the WTO put into effect a new agreement called the Agreement on Textiles and Clothing laying down a 10-year plan to phaseout the system of quotas and intergrate textiles and garments into the General Agreement on Tariffs and Trade rules.

The agreement replaced the Mutlifiber Arrangement, otherwise known as the Multifiber Agreement, which was adopted in 1973 by US, Europe and Canada that sets quotas for the amount of textile and apparel other countries could enter their territories.The Philippines through the Confederation of Garments Exporters of the Philippines became the 35th signatory of the Istanbul Declaration, which asks the WTO to extend the deadline of the lifting of the quotas imposed on garments and textile shipments to the end of 2007.

However, US President George W. Bush clearly stated that the United States, which is a major importer of garments and textile, would not extend the deadline for the lifting of the quotas imposed on garments and textile exports.

Despite the removal of the quotas, the GTEB expects the dollar earnings of local garments and textile exporters to kick up 14.3 percent to $3.04 billion next year from the projected $2.66 billion this year. The government expects the industry to post a flat growth this year.

Source: ABS-CBN News

July 14, 2004

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Added: July 14, 2004
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