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Kathmandu Wednesday September 26, 2001 Ashwin 10, 2058.
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MFA phase-out likely to impact
garment industry
Post Report
KATHMANDU, Sep 25 - Participants at a seminar today urged upon the need for
intra-regional co-operation among SAARC countries to enhance the competitiveness of the
garment industry in the region.
Garment entrepreneurs, employees and workers, including representatives from
five South Asian countries had gathered in the capital Tuesday to discuss on the issues
relating to the garment industry.
The thrust of all representatives from Nepal, India, Pakistan, Bangladesh and
Sri Lanka was to strive for higher productivity and greater quality to strengthen the
garment industry in the context of globalisation, especially the effects of the withdrawal
of the Multi-Fibre Agreement (MFA) that is set to expire from 2005.
The existing quota regime will be abolished once the MFA is phased out. The
representatives opined that the removal of quota allocations under the MFA is likely to
have an adverse impact on the region.
Experts warned that the removal of quota to Sub-Saharan African countries
have already resulted in the dying out of several small production units resulting in job
losses and downsizing in the SAARC countries.
Speaking at the inaugural session of the two-day workshop today, Palten
Gurung, Minister for Labour and Transport Management, warned that Nepal is likely to
suffer the most from the impending abolition of the quota system.
"Nepal will have to face the situation mores severely if it has to
compete with countries having comparative advantages in terms of technology, labour cost
and raw materials. This is high time to identify alternative strategy as preparedness to
face the situation in Nepal," he added.
"We have not focused on quality and productivity unlike Sri Lanka,
India, Bangladesh and Pakistan and our industries are the most vulnerable in South Asia in
the wake of quota removal," said Suraj Vaidhya, fourth vice president of FNCCI.
"The impact would be severe for women employed in garment
industries," said H Wijeratne, official at the Department of Labour, Sri Lanka, which
has around 32 percent of its labour force engaged in garment industries.
Nihal Rodrigo, SAARC Secretary-General said that the concerned
representatives to focus on the specific sectors to identify and address how the phase out
of MFA obligations would affect the lives of those in the garment sector.
Leyla Tegmo-Reddy, Director at the International Labour Organisation (ILO)
office, Kathmandu warned of serious social and economic implications for millions of
workers particularly women who are employed in the garment industries in South Asia
following the termination of MFA regime.
She urged the respective governments of the region to institute a strategy to
deal with the quota free competitive environment of global trade, which is just three
years away.
"ILO is gravely concerned about the potential job losses of millions of
men and women across the region as competitive pressures builds in the wake of MFA
termination," she said.
The participants expressed hope that they would come out with a strategy to
address the challenges of MFA phase-out faced by SAARC region.
Garment exports to the USA, which stands as the single largest importer of
Nepalese garments absorbing around 85 per cent of the total garment exports, in the last
fiscal year stood at around Rs 13 billion.
Twenty-nine participants from the South Asian
region are taking part in the workshop organised by ILO that concludes Wednesday.
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