The Mediterranean textile and clothing industry post the Agreement on Textiles and Clothing (ATC)

Résumé du document

The 1st of January 2005 displayed a significant turn in the international textile market with the eclipse of the quota system. The end of the quota system was in effect for nearly 30 Years, guaranteed an access for the rich countries in the textile industry to penetrate in the importation market and to further enhance the overall economic development of the country. In accordance with the exit of the ATC (Agreement on Textiles and Clothing), all textile companies which were represented by the small producer were striving to become the big importer. These companies in turn, feared that there will be a flood or overflowing of clothes manufactured in China, which is still the first global clothing exporter with a 28% of the market share. In the real sense, China hadn't signed the ATC in 1975 which meant that it had signed the agreement after the 1st of January 2005. Therefore, the possibility to exporting Clothes and Textiles in the entire world without following a quota system was the objective of the Chinese market. Globally, we are all aware that China gets a low cost workforce which attracts a lot of companies in different branches of industry. The Mediterranean companies were really affected by this emergence. Prior to the end of the ATC, countries like Morocco, Tunisia or Algeria were allowed to export their textile goods to the USA or to West Europe with a tag of a specific quota. Currently, they fear an apparition of large exportations of low cost clothes from China. Furthermore, some companies established in Africa were in the next phase of attracting and involved in exporting their activities to Asia. Nowadays, in the Mediterranean, nearly 90 to 95% of the firms are only subcontractors, without specific competency levels. Thus, this report will reflect on explaining and analyzing in part one the working of the international textile markets during the ATC. In a second part, we will speak about what were the consequences and the strategies that was being adopted by the companies after the end of the ATC. And to conclude, we will explicate and describe the different possibilities for the North-African Companies.

Extraits

[...] and in Marocco Moreover, China started to produce textile machines there is only few years ago (1990), they still know and realize this lack of technology and nowaday can only offer machines for internal market (Asian market). But as all the chinese economy and industry, teh textile's one know actualy a huge development and hope being able to compete against Mediterranean and Europe. They work hardly on the technology delay they acknowledge. This point is certainly the most important that Mediterranean should keep in consideration to stand competitive against China. [...]

[...] We can evidently realize the prices' difference and then feel the costs differnce. Many good quality suits between and 12$ One of the better quality suit we could find in Europe(silk) for 800$ in China) A huge European leader company's CEO watching good jeans around And then, since the begining of the 21st century, China has seen its inside habits consumption evolves for more than 20% every year! Intra-China, it represents commerce of Billion of dollards, with an increase of 18% between 2003 and 2004. [...]

[...] Different Options for the Mediterranean firms Morocco and Tunisia were the two countries really concerned with the effects of the liberalization of the textile and clothing market. The end of the quotas which privileged these two countries up to 2005 for an access to the European markets will have a harmful impact on the savings in these countries, based primarily on the textile sector, the first provider of employment and currencies. These Maghreb countries, as textile countries subcontractors, are likely to lose their competitiveness against competitor countries like Egypt, Turkey, India, Indonesia and China. [...]

[...] As the majority of the war was fought far from its national boundaries, it did not suffer the industrial destruction or massive civilian casualties which marked the wartime situation of the countries in Europe or Asia, and during the war the U.S. had built up a strong industrial and technological infrastructure which had greatly advanced their military strength into a primary position. The United States also headed NATO, commonly known as the Western Bloc or the First World before the Cold War. [...]

[...] From the firsts months in 2005, these orders' figures from Chinese importation in Europe and Mediterranean explain clearly the effect of the end of the quotas. This crisis was joined by a prices' decrease of these imported products around 37%. The importation was 273 million of throusers and 135 million of Pull-Overs and are now around 43 and 20 million (throusers and pull-overs). In all textile field, China gets precious advantages, from low production costs workforce and the potential to produce they can benefit, a giant production capacity. [...]