ISLAMABAD, Feb 28: The abolition of textile quota is likely to have a negative impact on Pakistan's textile products in short term unless the domestic pricing system is reformed.

World Bank researcher Will Martin in his report on "implications for Pakistan of abolishing textile and clothing export quotas" says that quota abolition will create opportunities, but will increase competition in the international markets. A big part of the increase in competition would come from China in the post quota period, he added.

Nevertheless, according to the report, a copy of which was made available to Dawn on Saturday, overall gains would likely to be positive because of improved situation in textiles.

He maintained in his report that the product heterogeneity would mitigate competition.

He was of the view that Pakistan should focus on increasing productivity because it would provide a basis for development of a globalized industry.

"The clothing sector will have greater opportunities, but increased competition may result into falling of exports and output in case reforms are not carried out in the textile sector."