Impressive performance in the first quarter


Nov 25 - Dec 01, 2002


The textile sector, as far as export performance is concerned, has made an impressive beginning at the end of the first quarter of the current financial year July-October 2002.

The current financial year is expected to culminate more handsomely if the textile sector sustains the prevailing trend in the textile exports and the US market allows additional room for textile products from Pakistan at some stage during the year.

The first four months of the year from July-October 2002 have added at least 14.86 per cent to textile exports with $2.230 billion as compared to export earnings worth $1.941 billion during the corresponding period last year.

The sector-wise break-up of the export performance during the first quarter reveals that cotton yarn fetched $329 million against $319 of the previous year, which showed an increase of about 3 per cent.

The export of fabric increased by 29 per cent to $431 million while knitwear earned $364 million as against $319 million showing a growth of 14 per cent.

In other sectors of the textile industry, bed wear and towels showed a growth of 27.4 per cent and 4.4 per cent respectively, as both the segment of the textile regime earned $380 million and $94 million against $298 million and $11 million respectively.

The sector of textile made-ups (garments) also showed improvement from $296 million to $361 million during the first four months of the financial year. This sector has also registered an increase of 21 per cent.

The increase in overall textile performance was mainly due to favourable market accessibility especially in the European Union market where Pakistani textile products have been allowed 15 per cent increase in quota besides various incentives including reduction in duty and other levies.

However in the textile sector despite the fact that EU has become major trading partner of Pakistan yet the US still has an edge due to larger share fetched by Pakistan products despite the fact that the US administration has not yet given the promised market accessibility to Pakistani textiles. Once the textile products from Pakistan were given increased market accessibility as promised it is expected that the textile exports would add handsomely to the total export earnings of the country.

In order to advance the negotiations with the US government in this respect, the long-awaited Pak-US textile meetings were held during the first week of the current month in Pakistan.

The US Under Secretary of State for Economic, Business and Agriculture Affairs Alan Larson attended the meeting, which was held in Islamabad early this month. Razak Dawood, Pakistan's federal minister for commerce and leading textile leaders also attended that important meeting.

The US government in order to facilitate Pakistan and acknowledge its role in international coalition to fight against terrorism had offered a small textile package, which includes marginal quota at the beginning of the current year. However, Pakistan had rejected the package and had demanded for 15 per cent increase in quota and duty-free access for Pakistan's textile products as granted by the European Union.

While demanding enhanced quota and other incentives for its products Pakistan has taken a plea that since Pakistan's textile exports to the US market had suffered a lot due to September 11 events, the US administration should compensate the losses by providing a better market access for its textile products.

The US is the biggest trading partner of Pakistan, and in the last year the volume of two-way trade stood at $2.43 billion, followed by EU countries with annual trade volume of over $2.4 billion. Pakistan currently exports a total of $1.9 billion worth of apparel and textiles annually to the United States and is the fourth-largest supplier of these goods. The US government as stated above is in agreement that Pakistan textile should be given more accessibility in the US market, however they are also facing pressures from different lobbies and US textile industry against permission of more space to Pakistan products in the US market. The pressure against Pakistan or other country products is due to economic recession in the aftermath of September 11 events in the United States.

Sen. Jon Kyl, a republican senator from Arizona has made a strong plea for easing US restrictions on the import of Pakistan textile to prevent thousands of Pakistani workers from losing their jobs and the national economy from being destabilized. The American Textile Manufacturers Institute had also suggested that the Bush administration direct the US agency for International Development (USAID) to place orders for Pakistani textile and apparel products in an attempt to offset the negative impact on Pakistan's textile exports. The US Association of Importers of Textile and Apparels, International Mass Retailers Association, American Apparel and Footwear Association and the National Retail Federation also pledged to help rescue the textile sector of Pakistan and to steer-up the US business in the country through planned efforts.