Govt to lobby for garments with same fervor before US Congress

President Gloria Macapagal-Arroyo said government will lobby for the garment industry with as much fervor as it did for war veterans before the US Congress.

“We are lobbying for the early passage of House Resolution 3039 with the same fervor with which we lobbied for Filipino World War II veterans’ benefits,” the President said in a high-level meeting of the Philippine Garments and Textile Association held at the Davao Room of the Sofitel Hotel this afternoon.

“Just as the US was finally receptive to the plight of Filipino veterans of World War II, we also hope it will be sympathetic to the needs of Philippine garment makers who have supplied the US market for so many years because it is a formula that will also help the US textile manufacturers,” she added.

The American Recovery and Reinvestment Act of 2009, which was passed by the US Congress on Feb. 14 and signed into law by President Barack Obama on Feb. 17 as part of the US government stimulus package, grants a one-time lump-sum payment of $15,000 for each US-based Filipino WWII veteran and $9,000 for those living in the Philippines.

House Resolution 3039 or The Save our Industries Act of 2009 was filed by American Rep. James McDermott (D-Washington) before the US Congress last June 25, 2009. Under the proposed bill, the Philippines, a former American colony, will be given preferential duty treatment to certain apparel articles sold to the United States.

HR 3039 is currently being deliberated by the US Committee on Ways and Means.

When enacted into law, Philippine garment manufacturers will be allowed to import and use American textiles for eventual shipment back to the United States as finished garments under the cut-and-sew concept. This will allow Philippine garment exports to enter the US duty-free instead of pay the standard 30 percent to 40 percent tariff.

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ATMA Urges Withdrawal Of Hike In Entry Tax On Textiles

From September 14, 2009, entry tax on textiles and all the allied products in Assam has been increased to 4 percent, which was 1 percent, earlier. The Assam Textile Merchants’ Association (ATMA) has urged the state Government to remove this hike in entry tax.

Cloth and textiles in all the adjacent states of the north eastern region and West Bengal are free from entry tax. So, if the entry tax on Assamese textiles is not removed, the textile business of the state will experience negative effects and will shift to the states free from entry tax, said the PRO, ATMA, Mr. Nirmal Samsukha, in a press conference.

Any kind of hike in the entry tax will prove to be detrimental for the lakhs of people directly or indirectly dependent on textile business which might worsen state’s unemployment situation, added Mr. Samsukha.

This tax hike on fabrics will impact local people also, who are already bearing the damaging effects of inflation, as their expenses on basic needs will go up due to price hike in all kinds of fabrics and clothing.

A memorandum requesting the withdrawal of this tax has been submitted to the Chief Minister and the Commissioner of Taxes by a team of ATMA. Another delegation of the Association had also met the government authorities earlier, with the same request, when one percent tax was imposed on textiles. 

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Economic operators to confront experiences of cotton sector, Secretary General

In his message to the Workshop on Trade and Investment in the Cotton Sector in OIC Member States, held in Cairo, Arab Republic of Egypt, from 12-13 October 2009, the Secretary General pointed out that this Workshop along with the Specialized Exhibition on cotton and textile are pragmatic steps in the direction of ensuring that the cotton and textile sectors are restored to their previous prime position.

He mentioned that cotton farming was once popular in a number of member countries of the Organisation as an employer of rural labor and at the same time providing raw materials for local industries. And the collapse of this sector can be traceable to paucity of investment and inadequate research and development, such that eroded the competitiveness of this local product.

The Secretary General urged this Workshop to review what is responsible for the present decay in the industry and how to overcome the current challenges. Closely related to the problems of the textile sector is the need to integrate the various processes in the industry, from the raw material stage to the intermediate and the final stages. He mentioned that there is the crucial problem of quality control, intellectual property rights, appropriate technology and the dumping imported fabrics in the market of member-countries.

In this context, He stated that the OIC has been interfacing with funding agencies to ensure that all the projects already approved by the Project Committee are properly funded. 

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Payment defaults puts textile suppliers in lurch

The concurrent festive season along with bringing cheers to the textile sector, is also adding to the woes of a few. According to reports emanating from the synthetic textile cluster of Surat, a few traders have declared bankruptcy, to the bewilderment of their creditors.

The last few months have been tough for the 50,000 odd textile traders of the city, whose order position had slipped abysmally in the last few months, due to a demand fall from the Northern and Southern India markets.

According to Mr Devkishan Manghani, General Secretary Federation of Surat Textile Traders Association (FOSTTA), there are two types of defaulters. One who do it intentionally, with a planned modus operandi. Such kind of defaulters starts doing business in the market with a small rented shop and trade for a period of two to six months.

“They try to purchase maximum stock from the suppliers and also give higher prices for the textile materials when compared to normal prices prevailing in the markets, due to which textile material suppliers get attracted to such traders, who later run away, leaving the suppliers in the lurch”, he said.

He added by saying, “The other kind of defaulters is more genuine & real. They get trapped in the usual ups and downs and price fluctuation in different products seen in the market as they would have purchased goods at a higher price, the price of which later falls down, due to which they may suffer heavy losses”.

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T&C sector dependent on low-cost competition

In the past 30 years, China's textile and garment industry has achieved a rapid development, both in production capacity and export scale and ranks the first in the world, but in the process has created increasing dependence on external markets.

But overall, China's textile and garment industry still relies on low-price competition from other competing countries, but its main business model is still at the primary stage of "Original Equipment Manufacturing” and also lags far behind the developed countries.

The 2008 financial crisis, led to a growth decline in China's textile and garment exports in last few months of 2008 and first seven months of 2009, as well as drop in exports from January to July of 2009.

But as experts suggest, export growth cannot indefinitely hold on and growth and de-growth are normal phenomenon and the main issue is whether industries are ready to look for opportunities from the crisis and whether they can take advantage of this "intermission" time to root out lacunae and problems within the industry. 

 

 

 

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