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PHNOM PENH, Mar 12 (AFP): Asia's most vulnerable garment sectors have survived -- even flourished -- and proved the nay-sayers wrong during their first year without the protection of the global quota system.
But industry officials say they have only done so with the help of additional safeguards imposed by the United States and European Union (EU) against textile giant China.
The end in December 2004 of the decades-old international quota system known as the Multi-Fibre Arrangement (MFA), which gave developing countries guaranteed access to developed countries' markets, was expected to doom the garment sector in countries like Cambodia, Bangladesh and Vietnam.
But all three recorded post-MFA export gains of between 9.0 and 11 per cent during 2005, keeping hundreds of thousands in work in an industry that is a key economic driver.
"We've proved all the doomsayers wrong," said Fazlul Haq, president of the Bangladesh Knitwear Manufacturers and Exporters Association.
In its first post-MFA foray, Bangladesh posted 11 per cent export growth led by knitwear -- T-shirts, sweaters and polo- shirts.
Bangladesh -- where over 4,000 garments factories account for three-quarters of export earnings and some two million jobs - - was singled out for its poor infrastructure, unstable political situation and lack of integration in the textile industry.
But the latest figures have dispelled the dire predictions.
"Last year, we easily beat our main competitor China in these segments. In addition, many of our big factories are so swamped with export orders that some had to refuse orders because of supply side constraints," said Haq.
The association's figures showed that more than 150 new knitwear garment factories began production last year while a large number of existing companies ramped up their production capacities.
But Haq acknowledged the country struggled at first against China's massive assault on the sector, only continuing its surge after the United States and the EU imposed more quotas on the east Asian giant.
In May 2005, the United States invoked safeguards contained in China's WTO accession agreement, which allowed it to impose quotas on seven types of textiles from China.
The EU took similar action in June following a sharp spiral immediately following the end of the MFA -- sector employment plunged about 10 per cent to less than 250,000 in Cambodia which also saw a boom following the additional safeguards. The 1.9-billion-dollar sector provides the kingdom with more than 80 per cent of its export earnings and employed 279,000 workers in 236 factories as of November 2005.
Exports rose 9.0 per cent last year, according to Van Sou Ieng, chairman of Cambodia's Garment Manufacturers' Association, but he warned that the expiration of the new safeguards at the end of 2007 will force a sector re-think.
Vietnam, where exports rose 9.6 per cent in 2005, hopes to counter China's onslaught by producing more raw materials and lowering production costs, said Le Van Dao, the general secretary of Vitas, an umbrella group for Vietnamese textile producers.
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