KARACHI, Nov 1: With only sixty days left to WTO's quota free regime from January 1, 2005, exporters of value-added textile goods are in a quandary as to how they would get their due share in the free market in the presence of bilateral arrangements such as Free Trade Agreements (FTAs) and Regional Trade Agreements (RTAs) under which tariff advantages are allowed.

This would mean there will be a sudden change in the complex of the world market as it would transform from sellers market to buyers market. In other words only those suppliers of textiles and clothing will survive who will be in a position to ensure prompt delivery, quality and above all competitive price.

The understanding on World Trade Organization (WTO) was reached between the nations in 1995 and its objective was to ensure globalization of free trade. It replaced the GATT.

Despite the fact that such bilateral arrangements are contrary to the objectives of free trade the WTO does not bar nations from entering into FTAs and RTAs. But the most damaging aspect of such bilateral arrangements was tariff concessions to the signatories thereby putting other nations at disadvantageous position.

Looking at the situation exporters of made-ups are rightly perturbed over the emerging scenario and feel that with the dawn of quota free era (January 1, 2005), they would be exposed to such competition which they would not be able to face. Suppliers of textiles and clothing from countries having bilateral arrangements under FTAs and RTAs would leave no room for those who have no such concessions. The US tariffs on textiles and clothing vary from 22 to 32 per cent, whereas in EU it is 12 per cent.

"We are not worried about market access our problem in the free market era would be competitive price and if we do not meet this challenge our exporters will be elbowed out by countries enjoying FTAs and RTAs status with the US or are better placed to avail the EU's GSP rules," asserted Aslam Ahmed Karsaz, chairman Pakistan Hosiery Manufactures Assocition (PHMA).

The duty concessions allowed under bilateral arrangements are so enormous that no exporter could cover them even after improving his efficiency to maximum or controlling other factors, which could help bring down cost of production, he added. "We are heading towards a difficult phase and our value-added sector, which employs largest segment of skilled and unskilled workforce may have to undergo challenges of its life time," he maintained.

Former chairman Pakistan Readymade Garments Manufacturers and Exporters Association (PRGMEA) Tahir Aziz told Dawn that already some units at Lahore and in Karachi have closed down and others are operating under-capacity. This is a strong indicator that the value-added textile sector needs some attention from the government side otherwise soon there will be large scale closures.

Most of the exporters are of a strong view that the government did not play its cards well while making deals with the US after 9/11. They say that one should not forget that Pakistan is a peculiar case of 20th century.

Chairman Pakistan Bedwear Exporters Assocition (PBEA) Shabir Ahmed said that nations give importance to market access and not to grants and aids but in our case he said the US is ever ready to dole out a couple of millions of dollars in aid but remains non-committed towards market access. "We do not need aid but need trade and this was the only way out for our economic prosperity," he added.

The exporters feel that time has come that this issue should be handled at the highest level and the President Pervez Musharraf should be asked to directly take up the issue with US and the EU heads of states rather than wasting further time as the people at the helm of affair in the ministry of commerce has so far failed to clinch any benefits. The EU should be asked to modify or bring in necessary change in its GSP scheme so that Pakistan being a peculiar case confronted with terrorism should be accommodated and get the duty free benefit necessary to keep afloat in the quota free market.