ISLAMABAD, March 1: Pakistan would retain a large part of its business with the United States and in some cases may emerge as a competitive alternative to China in the event of final phase-out of quotas on January 1, 2005.
This has been noted in a report "Textile and Apparel: Assessment of the competitiveness of certain foreign suppliers to the US Market" prepared by the US International Trade Commission (USITC).
It said Pakistan was likely to continue as a major supplier to US market because it was considered by many US firms as a competitive alternative to China, particularly for men's apparel.
Pakistan is also likely to continue to be a global supplier of cotton yarns and fabrics. The report counts large and relatively inexpensive labour supply, access to local supplies of raw cotton as key competitive factors.
It also noted that Pakistan government was taking steps to ensure the global competitiveness of the textile and apparel sector but personal safety and security of shipments between factories and ports are some key issues.
The report was sent to the US trade representative (USTR) Robert Zoellick in June last but remained secret so far. Its edited copy was released just ahead of Zoellick's visit to the supplier countries last month.
The report assesses the textile and apparel industries of certain foreign suppliers to the US market with respect to their competitiveness and other factors pertinent to their adjustment to the final completion of the phase-out of quotas next year as required by the Uruguay Round Agreement on Textiles and Clothing (ATC).
The report said although China would take large parts of the US apparel market in the post-quota period, other countries such as India and Pakistan may be considered as serious challengers.
China is expected to become the "supplier of choice" for most of the US importers both large apparel companies and retailers because of its ability to make almost any type of textile and apparel product at any quality level at a competitive price.
However, the extent to which China continues to expand its shipments following quota elimination in 2005 will be tempered by the uncertainty over the use by the US and other importing countries of the textile-specific safeguard provisions contained in China's World Trade Organization (WTO).
To reduce the risk of other low-cost countries as alternatives to China, particularly with India, which also has a very large manufacturing base to produce a wide range of textiles and apparel at competitive prices and a large supply of relatively low-cost skilled labour.
Over the long run, however, exports from China and India could be affected by their strong economic growth and increased local demand. "One or two other low-cost exporting countries in South Asia -Bangladesh and Pakistan - are expected to emerge as major suppliers for a narrower but still significant range of goods such as mass-produced basic knit cotton tops and woven cotton shirts and pants from Bangladesh and men's and boys' cotton apparel from Pakistan," said the report.