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Knocking on quota doors: textile exports increase.

Knocking on Quota Doors: Textile Exports Increase

Textile exporters and manufacturers have gone through hard times over the last few years, but the recession has channeled manufacturing investment into the textile sector's most competitive area, higher-value-added fashion goods, making the most out of quota restrictions in Turkiye's main OECD markets. The textile industry is becoming far more high-tech as larger companies invest in computer-aided design (CAD) and Computer-aided manufacturing (CAM) systems.

Since 1980, the ready-to-wear garment sector has expanded faster than any other in the industry, due to export-oriented government policies, selective investment incentives and import-duty waivers on capital machinery and equipment. Exports of ready-to-wear increased to $ 3.688 billion in 1990, from $ 488 million in 1984; its share of total textile export rose from 27 per cent to 39 per cent over the same period.

This year could see a recovery for the sector, at least in export sales an acceleration in the Turkish lira's depreciation on foreign-exchange markets has improved price competitivity. While exporters could not fill EC and US quotas last year, in 1991 they will probably make good use of a doubling of US import quotas. Markets in Canada and Sweden are opening up as well, following Turkiye's support of the Western coalition during the Gulf crisis. Senior Treasury officials estimate that the US quota increases alone could raise textile exports to the United States to around $ 1 billion annually. In the main market for Turkish textile, the EC, quotas have been expanded to 30 per cent, permitting an overall increase in exports of textiles to the EC by $ 250 million in 1991 compared with 1990, and by $330 million in 1992 compared with this year around 75 per cent of all Turkish textile export go to the EC.

Coordinating the export effort is the Istanbul Textile and Garments Exporter's Association (ITKIB). Over the past two years, it has allocated quotas based on past performance, which favours larger firms and used free pool distributions through a capacity qualification, which encourage mergers among small sweat-shops and their assimilation into the medium tier of companies, optimizing the quotas. At home, import liberalization has reduced the profitability of yarn- spinning and gray-cloth weaving, to the extent that many manufacturers are phasing out these operations.
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Title Annotation:Pakistan
Publication:Economic Review
Date:Aug 1, 1991
Previous Article:GGT USA computer integrated manufacturing systems for the Pakistan clothing industry.
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