Textile quotas cause an unusual split in the developing world

Emerging economies vs developing countries

A club comprising of several small developing countries, led by Bangladesh, is making a last-ditch effort to protect their textile industries after next year’s trade liberalisation causes a tectonic shift. In this venture, the club finds itself with an unlikely ally — the United States. All fear that China’s unbridled entry into the international textile markets will have a severe impact on their domestic industry; and in the case of Bangladesh, Mauritius and other small countries whose economies hinge on textile exports, the impact could even be catastrophic. The European Union, watching with keen eyes from across the Atlantic, is ready to raise the drawbridge if it sees the United States make any attempt to introduce trade barriers.

Pitted against this unlikely alliance of the world’s richest and the world’s poorest is an equally unlikely alliance of the world’s most notoriously quarrelsome neighbours — China, India and Pakistan, who are expected to gain most from the liberalisation of the textile quotas. Among themselves the Asian textile trio will be fierce competitors, but any barriers to free-trade will leave all worse off. At stake is the global textile market worth about $350 billion at last count.

At the WTO’s goods council at least, traditional geopolitical allies find themselves on opposing sides of the fence; leaving Mauritius and Nepal on the wrong side of India, and Pakistan on the wrong side of the United States.

1 thought on “Textile quotas cause an unusual split in the developing world”

  1. I do not know whether India is doing the right thing here. What India will gain from the quota removal is peanuts compared to what China will gain. If we get a few years, we will stand a greater chance – then again we might not be able to build on either, we never know.

    The WTO has a clause wherein imports can be taxed if they affect the livelihood of people in the importing country. They probably will try something on the lines of protecting livelihoods in third countries here, as it is very likely that Chinese industry will render large numbers in Bangladeshis without the pittance that they currently get as salaries.

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