ITC Reports on Likely Effects of January 1, 2005 WTO Textile and Apparel Quota Elimination on Supplier Countries
The International Trade Commission (ITC) has issued a report entitled, Textiles and Apparel: Assessment of the Competitiveness of Certain Foreign Suppliers to the U.S. Market.
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This report assesses the textile and apparel industries of certain supplier countries to the U.S. market with respect to their competitiveness and other factors pertinent to their adjustment to the final completion of the phaseout of quotas for World Trade Organization (WTO) member countries on January 1, 2005, as required by the Uruguay Round Agreement on Textiles and Clothing (ATC).
The ITC states that this report assesses the textile and apparel industries of (1) significant ATC suppliers to the U.S. market, (2) Mexico, and (3) other supplying countries with preferential market access.
This is Part II, the final part of a two-part series of summaries of the ITC's report. This installment focuses on the wage data of selected countries as well as what percentage of those countries' total merchandise exports is represented by textile and apparel.
ITC's Wage and Export Statistics for Certain Countries
According to the ITC, U.S. apparel companies and retailers stated that a country will need to have an abundance of skilled, inexpensive, productive labor to remain competitive in a post-quota world. The cost and availability of a trained or trainable workforce will be critical.
However, low wage rates alone are not a good indicator of labor costs, as rates of productivity, which contribute to the cost of labor, vary among countries. For example, although wage rates are higher in China than in such countries as Bangladesh, India, and Vietnam, productivity is considered much higher in China, making China's overall labor cost lower.
The ITC has computed the following countries' 2002 hourly compensation for textiles and apparel as well as the 2001 percentage of their total merchandise exports that are represented by textiles and apparel:
| 2002 hourly compensation* | Textiles & apparel as percent of total merchandise exports for 2001 | ||
|---|---|---|---|
| Textiles | Apparel | ||
| East Asia: | |||
| China | $0.41, $0.69 | $0.68, $0.88 | 20% |
| Hong Kong | $6.15 | N/A | 52% |
| Korea | $5.73 | N/A | 10% |
| Taiwan | $7.15 | N/A | 10% |
| South Asia: | |||
| Bangladesh | $0.25 | $0.39 | 86% |
| India | $0.57 | $0.38 | 26% |
| Pakistan | $0.34 | $0.41 | 73% |
| Sri Lanka | $0.40 | $0.48 | 61% |
| ASEAN countries: | |||
| Indonesia | $0.50 | $0.27 | 14% |
| Malaysia | $1.16 | $1.41 | 4% |
| Philippines | N/A | $0.76 | 8% |
| Thailand | $1.24 | $0.91 | 8% |
| Suppliers covered by FTAs: | |||
| Israel | $8.17 | N/A | 4% |
| Jordan | N/A | $0.81 | 17% |
| Mexico | $2.30 | $2.45 | 6% |
| CBERA Countries: | |||
| Costa Rica | N/A | $2.70 | 14% |
| Dominican Republic | N/A | $1.65 | 51% |
| El Salvador | N/A | $1.58 | 60% |
| Guatemala | N/A | $1.49 | 37% |
| Haiti | N/A | $0.49 | 83% |
| Honduras | N/A | $1.48 | 63% |
| Nicaragua | N/A | $0.92 | 37% |
| Sub-Saharan Africa: | |||
| Kenya | $0.62 | $0.38 | 5% |
| Madagascar | N/A | $0.33 | 44% |
| Mauritius | $1.33 | $1.25 | 63% |
| South Africa | $2.17 | $1.38 | 2% |
| Andean Countries: | |||
| Colombia | $1.82 | $0.98 | 7% |
| Peru | $1.63 | N/A | 11% |
| Other Countries: | |||
| Egypt | $1.01 | $0.77 | 23% |
| Turkey | $2.13 | N/A | 34% |
*includes wages and fringe benefits
hourly compensation for China, other than coastal areas
hourly compensation for coastal China
reflects labor compensation for factories producing moderate to better apparel.
estimated by ITC based on percentage change in world imports from the country from 2000 to 2001.
(See ITT's Online Archives or 02/20/04 news, 04022015, for Part I of the summary of this report.)
Public Version of ITC's Report (dated January 2004) available at http://63.173.254.11/pub3671/main.html
ITC Press Release on Report (Press Release 04-015, dated 02/09/04) available at http://www.usitc.gov/er/nl2004/ER0209bb1.HTM