July edition 2004 Highlights of the Newsletter Textile exports to free trade zones suggested Sales tax on imported cotton to continue Us, EU lobbies for extension in textile quota regime Cotton yarn prices further decreasing in china while rising in Pakistan The show- instyle Pakistan Trade chiefs to set up textile cities EU’s imports of m/b cotton denim trousers EU’s imports of printed cotton bed linen China exports more to Japan China’s prices could fall more than expected Us offers generous rules of origin to Bahrain Joint ventures in textile stressed China plans to set up large spinning unit

Textile exports to free trade zones suggested The country would not be able to compete in quota free regime if necessary measures needed towards increasing productivity of textile and clothing sector along with reducing infrastructure and power cost and rationalization of tariff were not adopted. These and other suggestions have been made by the World Bank in its recent report on "textile and clothing policy note: implications for Pakistan of abolishing textile and clothing export quotas." It further stated that Pakistan is more vulnerable to quota regime as more than 60% of the textiles and clothing exports is towards quota countries, therefore, this dependence needs to be directed at the earliest to free trade zones. This is only possible if the atmosphere needed for such a change as outlined by World Bank study is created. This could be achieved by making immediate moves to increase the productivity of the textile and clothing sector by reducing the cost of infrastructure and power and by improving the situation of law and order. The WB study states that on an average, Pakistani producers of these goods currently face lower export tax equivalents than do exporters in competing countries. The result will be that abolition of quota will make the products of rival countries more price responsive as the removal of quota costs will be lower for Pakistan than other countries which will give them a better margin and ability to compete. The report states that Pakistan faces tough competition in textile made-ups from china and India apart from Vietnam and turkey and in some categories the similarity of products goes up to 90% (towels) with china or in case of shirts and trousers 73% with china and 84% with India.

Featured Site for Review Review Of Your Web Site Submit Your Web Site Sales tax on imported cotton to continue Though 15 percent sales tax on ginned cotton has been withdrawn, on imported cotton it would continue. This was made clear to textile millers who met central board of revenue officials in Islamabad on Friday. "The CBR has assured us to consider our proposal to withdraw 15 percent sales tax on imported cotton," said chairman of all Pakistan textile mills association, Waqar Monnoo. The withdrawal of sales tax was a demand of the cotton and textile sector. Textile miller’s import about 20 percent imported cotton. This year textile millers have booked 2 million bales. "This sales tax on imported cotton would block our liquidity but we hope, sooner or later, it will go," said Waqar. Quote of the Month "The illiterate of the 21st century will not be those who cannot read and write, but those who cannot learn, unlearn, and relearn." FREE SUBMISSION Exclusive Offer Our Subscribers Submit your website in Search Engines for FREE Click here or mail submit@5icreations.com

Us, EU lobbies for extension in textile quota regime
Karachi: lobbies in us and the European Union have sped up their efforts to get an extension in the textile quota regime, which comes to end on December 2004, as per the WTO covenants. According to information reaching from the WTO head quarters - Brussels, a large coalition of 71 trade associations from the us, EU, turkey and some other countries, are trying their utmost in obtaining a three-year extension in the quota phase-out. A summit meeting is scheduled to take place in Brussels by mid-June to force governments requesting a delay in the quota removal or to restrict the general use of the textile safeguard limiting imports from china. Although the US has announced to enforce the import surge surveillance system (ISSS), which would monitor all textile imports from china and restrict them to a limit, the manufacturers’ lobbies are striving hard to get an extension in the quota regime.
The American textile manufacturers institute (ATMI) while leading these associations had already requested a WTO meeting in Brussels next month seeking a two-year textile quota extension until January 2007. The WTO has, however, yet to make any reply to the ATMI. The lobbies working against the textile quota regime beyond January 2005 have sounded an alarm on the total domination by china in the textile market due to its cheap price and its ever-improving quality especially in textile made ups and clothing. The ATMI and other textile manufacturers in the US and the EU have taken the plea that cheap Chinese textiles would capture their market in us and EU resulting in massive closure of their own industries. The sources, have however, claimed that textile barons sponsor the associations and lobbies working against the quota-free regime.
The major textile manufacturers in quota countries hold the biggest chunk of textile quotas, they added. They term the plea of the closure of textile units in us and the EU due to the quota free regime as baseless because units declared inappropriate have already been closed down. The chairman, all Pakistan textile mills association, Mian Waqar Monno urged the government recently to foil all such efforts by the lobbyists trying to get an extension in the textile quota regime. He said that the extension in the textile quota regime is against the interest of the country and it would block the growth of Pakistan’s textile sector besides eliminating the small and medium scale exporters.