Meeting focuses on importance of textile trade liberalization
The International Apparel Federation held its 13th convention in Hong Kong on May 12 and May 13. The Jakarta Post's reporter, Rita A. Widiadana, attended the two-day event at the invitation of the organization's president.
HONG KONG (JP): The message sounded loud and clear at the International Apparel Federation (IAF) convention: find effective ways to liberalize the world's textile and clothing industry.
IAF President Sunjoto Tanudjaja said many developing countries were looking forward to freer world trade in textiles and apparel, the total value of which reached US$300 billion in l995, especially with the gradual abolition of import quotas and tariff barriers by the year 2005 under the auspices of the World Trade Organization (WTO).
The 400 participants included Paris designer Nino Cerruti, Elsa Klensch, style editor of CNN, Gaetono Marzotto of Marzotto SpA and Indonesian designer Iwan Tirta.
The meeting brought together leaders from all facets of the industry to discuss global trade, retailing and changing consumer markets, fashion, new technology, education and training, as well Asian sourcing.
The primary focus of the event was the key issues influencing the apparel industry worldwide and the impact of finished fashion products on different markets.
Indonesian Minister of Industry and Trade Tunky Ariwibowo said in his keynote address that the global apparel trade is still dominated by importing countries.
"Many restrictions are still being imposed by importing countries, which harm the growth of the industry in emerging countries like Indonesia," he said.
The United States is one of several countries imposing quotas on textiles imported from various countries, including Indonesia. About 60 percent of the U.S. imports of textiles and textile- related products are under the quota scheme.
The textile and garment industry still plays an important role in Indonesia's non-oil exports, contributing $6.2 billion, or 13.6 percent, to the country's total exports in l995. The nation's textile and clothing exports increased to $6.8 billion last year.
Tunky said importing countries were still imposing various forms of protectionist measures, including anti-dumping regulations, which contravene the Agreement on Textiles and Clothing (ATC) reached in the Uruguay Round of trade negotiations.
He explained that the ATC, aimed at liberalizing the world's textile and clothing trade by the gradual abolition of import tariffs and quota arrangements, promised more business opportunities and jobs for developing countries.
"It is important for the WTO to review and tighten the guidelines on when and whether a product is dumped," he said.
Richard Hughes, a director at the WTO, admitted that developing countries still have to work hard to solve complex problems related to their textile and clothing industry.
Mamoru Hashimoto, vice chairman of the Kansai Economic Federation, acknowledged that under the Multi Fiber Agreement (MFA), important GATT principles on textile trade were not applied strictly.
"We can expect that textile trade will become more liberal, especially after the transition period," Hashimoto said.
Sunjoto, who is also president of Jakarta-based PT Great River International, said local textiles and textile-related products are having trouble maintaining their competitiveness on the global market.
"The high costs of inefficiency and the bureaucracy have affected local producers' competitive edge," he said. "High interest rates, high tax rates, various legal and illegal levies, as well as increasing tariffs of electricity, telephone and water supplies, are also burdening our textile industry very much."
To boost Indonesia's textile exports, Sunjoto emphasized the importance of overseas promotion and bilateral discussions between major importing and exporting countries.
"This year's convention is very important to boost the growth of our textile and garment industry. Here, we can meet prominent industrial executives from all over the world," he said,
As the president of IAF, Sunjoto promised to do his best in promoting Indonesia's textile and clothing exports worldwide.
"Currently IAF's members countries are mostly from developed countries," he said. "But they are our important buyers. I have been trying hard to draw memberships from developing nations so that we will have strong bargaining positions in this organization."
Asia
The meeting also discussed the map of the international textile and clothing market in the coming 21th Century.
Ken Watson, director of the United Kingdom Apparel & Textile Challenge, believes that Asia will become the most important consumer market for the next millennium.
"Asia as a consumer market offers the greatest growth potential over all other continents as a result of its high population base and its high economic growth," Watson maintained.
He continued that market opportunities were already present. "The producers will become stronger and, therefore, strategic alliance with the Asian region is a necessity."
He also said there is a strong consumer base in Asia as more than 60 percent of its population (excluding Japan) is aged between 15 and 65, and rapidly absorb news international fashion trends.
Watson categorized the global textile and clothing markets as falling into four groupings of the Mature Economies, First Wave Tigers, Second Wave Tigers and Emerging Markets. Each has its own opportunities and challenges, he added.
The Mature Economies and First Wave Tigers include Japan, the United States, Canada, western European countries, Hong Kong, Singapore, South Korea and Taiwan.
Japan is a mature market with changing patterns of distribution due to the emergence of new suburban retail shopping centers and a shift in consumer demand favorable to competitively priced imported products. This market, however, is notorious for its complex distribution systems.
Hong Kong, one of the most sophisticated retailing centers in Asia, is seen as a major stepping stone to the larger Chinese market for the next millennium. Singapore is still an important center for the region, while South Korea and Taiwan have less well-developed retail market as a result of historical tariff barriers (now largely removed) and unavailability of appropriate retail space.
In the Second Wave Tigers, such as Indonesia, Malaysia and Thailand, exposure to Western lifestyles is rapidly changing consumer demand and local retailers are adopting the successful retail format of Western countries.
The development of mega shopping malls in such countries have had major effects on the lifestyles.
The Emerging Market like China is still hampered by complex regulations, inadequate distribution infrastructure, inexperienced local management and lack of suitable retail space.
Despite these shortcomings, Watson suggested that Asia must be a fundamental part of the global strategy both in manufacturing and retailing. The growth of manufacturing within the region is impressive, often with the latest technology and supported by skilled and adaptable workforce.
Strategy
While the apparel business is no longer limited to the national borders, companies are forced to develop international strategies and experience.
Tom Edge, a member of the IAF's Training Committee, maintained the importance of human resources development.
"People are the key to achieving market demands -- in whatever country or culture. People can affect cost, quality and efficiency," he noted.
He continued that the products must be of high quality in terms of designs and manufacturing with keen prices and prompt delivery to the market.
A well-trained workforce is important to support the industry, he said. Successful companies which attract best personnel are those which have developed successful training and education programs for all levels of staff, as well as those which continually adjust to the latest management and technology.
Issues dealing with human resources development, management and technology will also be the three most important subjects at next year's IAF Convention in Florence, Italy.
Gaetono Marzotto, the future chairman of the l998 IAF convention, stated: "I want to encourage all member countries to send their best personnel of all levels to absorb valuable inputs from the next convention which will focus more on human resources development."
Regardless of what technology and global trade system is being developed, consumers remain the most valuable assets to the textile and clothing industry.