GENEVA — The expansion of global trade in textiles, apparel and footwear over the next few years is to be driven largely by the rise in consumer expenditures in the U.S. and the European Union, a report by the World Trade Organization predicts.
The study, titled “World Trade Report 2006,” notes that consumer spending on apparel and footwear in the U.S. “expanded much faster than overall consumption over the last three years underpinning import growth.”
The reintroduction of new quotas on Chinese textiles and apparel imports in the U.S. and EU markets, the report observes, will cap the expansion of Chinese sales in 2006 and 2007. However, the report argues that the growth rates in the quotas in both markets “are well above past import demand trends, so China’s share of imports in these two markets can be expected to increase over the next few years.” This implies, the report said, that competitive pressure on the world’s largest import markets for textiles and apparel will prevail.
WTO economists estimate that global trade in textiles and apparel expanded in value terms by 5 percent in 2005, compared to 12 percent the year before. China proved an exception, with exports expanding by 21 percent, or marginally faster than in 2004.
According to WTO estimates, U.S. imports of textiles and apparel increased by 6 percent in 2005, or at about the same rate as in 2004, to reach $102.6 billion.
Trade economists at the WTO point out that growth rates from different suppliers “exhibited considerable variation, ranging from a 43 percent increase for China to a decrease of 24 percent from the Republic of Korea.” Double-digit growth rates in shipments to the U.S. market were also posted last year by India, Indonesia, Pakistan, Bangladesh, Cambodia, Jordan and Peru.
Hong Kong, South Korea, Macao and Taiwan combined posted a 17 percent drop in exports to the U.S.
Imports from countries and regions that have brokered preferential trade agreements with the U.S. government also registered decreases.
“U.S. imports from Sub-Saharan Africa shrank by 17 percent, those from NAFTA member states decreased by 6 percent and those from CAFTA member states plus the Dominican Republic declined by 4 percent,” said the report.
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Overall import prices for textiles and apparel in 2005 increased slightly faster than for other categories of manufactured goods. But the report goes on to highlight that for the first nine months of 2005, U.S. import prices for textiles and apparel from all sources “remained basically unchanged, while prices of other manufactured goods increased slightly over the preceding year’s level.” These data, the report argues, do not support the view that the termination of quotas had a marked downward impact on prices at an industry level. However, a review of the products subjected to U.S. safeguard measures “revealed that the unit price of products originating from China decreased sharply in 2005.”