Caribbean Clothing Exports Face Another Threat

According to the 2008 World Trade Statistics Yearbook, the Caribbean is again facing severe competition in the manufacturing sector.

For clothing exports, WTO explained that the Caribbean and its neighbouring countries in South America are facing fierce competition from countries with low labour costs.

According to reports, labor-intensive mass production activities are generally concentrated in countries with low labor costs, usually in the export processing zones of developing countries.

They import raw materials or other semi-finished products for export after processing or assembling.

For some countries, these export processing zones occupy most of the total exports.

From 1997 to 2007, the exports of manufactured goods in the export processing zones of Mexico, Dominica and some other countries in Central America grew faster than the exports of traditional products in the first half cycle, but they lagged behind the export of traditional products in the second half cycle.

In the report, it is particularly mentioned that China's accession to the WTO in 2001 and the expiration of the agreement on textiles and clothing in late 2004 have intensified competition in the global garment market, reflecting the low export growth in the export processing zones.

Competition also comes from emerging Asian powers such as Vietnam and Kampuchea, as well as traditional competitors, such as India and Bangladesh.

As a result, imports of clothing from the Caribbean countries' export processing zones fell by an average of 13.4% annually.

The Yearbook also highlighted another reason for the decline in export growth of manufactured goods, which is the increase in export earnings of natural resources.

Some preferential trade agreements, such as the US Caribbean basin plan, and the defensive measures adopted by the European Union and the United States in importing certain textiles and clothing in China have made exports of some developing countries flat or even a small increase.

Some preferential trade policies allow clothing processing originates from cloth outside the United States.

This is good for small exporters, such as Madagascar and Haiti.

In the past five years, their clothing exports to the United States have increased by 26% and 15% respectively.

Some countries have tried to diversify their export processing zones.

During the period from 2002 to 2007, the Republic of Dominica exported 9% of its electrical and jewellery exports.

Mexico has shifted to relatively high technology areas such as auto parts, TV sets and projectors.

Between 2000 and 2007, exports of televisions and projectors increased by 21% annually in Mexico.

Costa Rica also increased its average export volume of office equipment and communications equipment by 21% over the past year.

China is currently the Costa Rica's main export destination for these products, accounting for 32% in 2007.