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Business

May 22, 2018

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Trilateral trade accord to boost global textile market share

ISLAMABAD: A trade accord between Pakistan, China, and Vietnam could help claim 50 percent share of the global textile market, a study suggested on Monday.

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“China’s share in the textile export was 36 percent, Vietnam contributed 12.4 percent, and Pakistan 7 percent, therefore a trilateral products’ specific agreement between the three countries can make a huge difference,” Federation of Pakistan Chambers of Commerce’s (FPCCI) Research and Development Department said in a report.

The study was conducted with the consultation of the FPCCI’s Export Advisory Committee, which was formed in compliance with Prime Minister’s directives to submit proposals for boosting export from the country.The report contains issues of the export oriented sectors including textile sector which has largest share in Pakistan’s exports.

The study said the regional competitors were upping the ante on textile exports to make inroads into more global markets, while Pakistan, which had almost fallen out of the competition, had even regressed in the worst possible ways owing a number of crippling hurdles.

“Bangladesh is eyeing $60 billion worth of textile exports, India is targeting an increase of $30 billion, while Pakistan’s total exports have decrease from $25 billion to $20 billion in which textile sector’s share is 61 percent,” the FPCCI paper said.

The report also identifies various problems being faced by textile sector including high cost of doing business approximately 11 percent multiple taxes and surcharges. “Low production of cotton bales, limited implementation of government announced support in Strategic Trade Policy Framework (STPF) and Textile Package, uncompetitive utility and raw materials to the textile sector are also among the factors that weighed on the country’s textile exports,” the study said.

Pakistan is the only country in the region that has seen its total textile exports declining by 10 percent between 2011 and 2018.

Other economies like China, India, Bangladesh, Sri Lanka and Vietnam have grown their exports at a compound rate of 20 percent or above during the same period.

Vietnam, a relative newcomer, in the sector posted a compound export growth of 107 percent followed by Bangladesh with 61 percent.

Pakistan predominantly being a textile export economy is struggling to keep the remaining share in global textile markets both in basic and value-added textiles.

Pakistan Bureau of Statistics data showed country’s textile exports rose 7.2 percent to $8.79 billion during the first eight months of the current fiscal year of 2018 as value-added sector continued to post recovery in foreign earnings.

Though, in February, textile exports ticked up 7.14 percent year-on-year, they went down 1.81 percent month-on-month owing to value-added sector’s failure to sustain the pace of growth in the month under review compared to January 2018. Textile exports, which make up around 60 percent of the country’s total exports, were recorded to be at $8.21 billion in the same period of the last fiscal.

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