GENEVA — Canada’s textile and apparel industry is experiencing a significant decline despite government initiatives to support the sector, a World Trade Organization report said.
Textiles and apparel contributed 4.8 billion Canadian dollars to gross domestic product in 2005, compared with 6 billion Canadian dollars in 2002, said the report, prepared for a review by the WTO’s 150 members. It notes that Quebec accounted for “just over half” of Canada’s total textile and apparel shipments and Ontario for about one third.
The study points out that employment in the more capital-intensive textile industry “has been relatively stable” but notes that job losses in the more labor-intensive apparel sector have been significant, falling to 71,000 at the end of 2004 from 94,000 in 2002.
Since 2003, the government has launched a series of initiatives to help the textile and apparel industry become more internationally competitive. This included 33 million Canadian dollars in January 2003 to help companies and associations apply new technologies, enhance productivity, diversify products and identify high-potential niche markets.
In 2004, the government initiated a three-year program called Cantex, valued at 26.7 million Canadian dollars, aimed at helping Canada’s textile industry improve its productivity and refocus production on higher-value-added products through equipment and technology investment and reengineering of production. At the end of 2004, the plan was supplemented by an additional 50 million Canadian dollars and extended until 2010, the report said. However, Cantex was cut by 24.7 million Canadian dollars last year.
In 2005, Canada’s exports of textiles to the U.S. were valued at 2 billion Canadian dollars, up 1 percent compared with the previous year, and accounted for a 9.1 percent share of imports in the sector, according to WTO data. In the same year, Canada’s exports of apparel to the U.S. were worth 1.4 billion Canadian dollars, down 13 percent on the previous year, and represented a 1.9 percent share of total U.S. apparel imports.
Overall, trading partners praised the openness of Canada’s trade regime but noted that more could be done in lowering barriers in some sheltered agricultural sectors like poultry and dairy and reducing barriers on foreign investment.
“Roughly $1.5 billion worth of goods and services cross our border every day, representing the largest two-way bilateral trading partnership in the world,” said Peter Allgeier, U.S. ambassador to the WTO.
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Canada is also the U.S.’s largest goods trading partner, “with $534 billion in two-way goods trade during 2006, an increase of 44 percent since 2002,” Allgeier said, adding that bilateral investment exceeds $379 billion.