Labour costs will not make products uncompetitive in the post-quota world as feared by the Pakistani textile exporters, but instead quick turnaround would play a major role in winning customers. This has been revealed in a voluminous report from the Organisation of Economic Cooperation for Development (OECD) to be released shortly which says that access to quality fabrics will also be major factor such as tariff preferences with rules of origin playing an increasing role in the post-quota trade game.
New factors will emerge rapidly for determining comparative advantages in the textile and clothing trade in the post-quota era commencing after few days.
" In the post-Agreement on Textile and Clothing (ATC) period, there will be neither quantitative restrictions nor the MFA-related quarantined market access to mask the vulnerable situation of the national suppliers," the report said.
It said the supply chain management would now prevail as buyers were increasingly favouring full-package strategies rather than selecting and delivering the textile materials to apparel producers in low cost countries.
The availability of quality yarns and fabrics required by the US and EU importers would be the key factor for doing business in the post-quota period along with the ability to produce and deliver the products, the OECD report added.
The report further said that although the textile production was migrating from developed to developing countries, certain nations continued lacking in yarn and fabric capacities. However, since those countries also imposed high import tariffs to protect their textile industry, their clothing products could rapidly lost markets in the coming months and years.
It said the ability of the poorest nations to benefit from the US and the EU tariff preferences would also play a determining role in the new free quota era.
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