WTO: Impact on Home Textile Export of Pakistan

Abstract

The textile industry is the backbone of Pakistan ' s economy with a status of the largest industry and with comparative advantage of resource utilization . Trade in textiles and clothing has remained highly distorted . For more than thirty years , tills sector was governed by special regimes : the Short Term Cotton Arrangement in 1961 , the Long Term Cotton Arrangement from 1962 to 1973, and the Multi Fibre Arrangement (MFA) from 197 4 to 1994 . The MFA was a deviation from the general preferences of General Agreement on Tariffs and Trade (GATT) . The Agreement on Textiles and Clothing was formulated in such a way that developed countries could essentially postpone the elimination of restrictions until 2005 since half of the products are to be liberalised only on the last day of the Agreement . Home textile products are an important valueadded category of Pakistan ' s textile exports . It is obvious from the foregoing data that Home textile products exports from Pakistan have made steady progress since 1994-95 and have arisen from about 6 . 5% to about 18% of the total textile exports in 2002-2003 . The Home textile products exports crossed the US$ 1 . 0 billion mark for the first time in the history of Pakistan in 2002-2003 . Credit for this commendable performance goes to all Home textile products exporters . It is most unfortunate that the European Commission (EC) has again imposed 13 . 10% anti- dumping duty on Pakistani Home textile products at a critical juncture when quota free regime (WTO) is commencing with effect from 01/01/2005 . Home textile exports have a large share in total textile export and market of home textiles are targeting to Europe and America . In these regions exporter exports on the quota basis and home textile exports affected due to quota elimination in these sectors after WTO' s implementation. This study is basically a descriptive study that is undertaken to get the perception of the home textile industry rega rding the WTO and how the i ndustry will face it as a combination of opportunities or threats and both opportunities and threats with same ratio . The ultimate goal ; of the study is to find out that the basic factors or variables which can influence the home textile exports . Researcher selected 100 different units randomly located in different areas such as Karachi , respondent of this study were Faisalabad and Lahore . The the executives and the questionnaire is based upon the very important to important ranking scale and Yes or No Quest i ons. methodology that is gain to be used for analys i s is a) Weighted Mean b) Percentage. least The The conclusion drawn from the study is that the WTO will create both opportunities and threats . It will depend upon companies that how they made strategy to face the threats . It has been found that all respondents perceive the same degree of importance to factors (quality , Price , Quota , Tariff and non tariff barriers and government policies) in respect to their importance in post WTO regime . Pakistan has never realized its full quota in European , American and Australian markets . In fact quota realization by Pakistan has been around 70 per cent only.