Textiles products may not qualify for ASEAN

JAKARTA (JP): High import contents will possibly exclude textiles and textile-related products from the free trade arranged by the Association of Southeast Asian Nations (ASEAN).

The secretariat of the ASEAN Federation of Textile Industries said on Sunday that all textile industries in the association's seven members are still dependent on imported raw materials, both cotton and synthetic fibers.

"Although textiles are included in the fast tract along with 14 other products, the implementation (of textile liberalization) will be thwarted," the federation said.

The Common Effective Preferential Tariff scheme for the ASEAN Free Trade Area (AFTA) agreement has prioritized 15 products, categorizing them as fast tract, to be liberalized by year 2003.

However, the scheme's rules of origin stipulate that products which can be traded freely for the AFTA have to contain ASEAN materials of 40 percent.

"The textile products have to meet such rules of origin, which require 40 percent local content. Yet, most of raw materials for textiles are still imported from countries outside ASEAN," the federation said.

The federation plans to conduct its 15th plenary meeting and 16th council meeting on July 25 and July 26.

It also expressed concern over the decrease of cotton production in China, once a cotton exporting country.

"To meet its spinning needs, China has entered the market, looking for more cotton. And of course it raises more concerns over cotton supplies to ASEAN countries," the federation noted.

ASEAN groups Brunei, Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam.

Meanwhile, Indonesia, the world's largest cotton importer with 2.5 million bales per annum, has a problem with its largest U.S. cotton supplier, Calcot. Ltd., which supplied a number of local spinners with fungus-infected cotton.

The federation also called on cotton producing countries not to impose a ban on cotton exports. It cited China and Pakistan as countries which have banned cotton exports, including orders which have been committed by their exporters.

The chairman of the federation's cotton commission, Husein Aminuddin of Indonesia, has sent letters to Pakistan's trade minister, asking his government not to ban cotton exports which have been committed by Pakistani exporters.

"In reality, however, all cotton supplies stated in contracts have been terminated unilaterally by Pakistani cotton exporters," the federation said, adding that such a supply termination has created losses to spinners in ASEAN.

In addition to supply problems, textile industries in ASEAN also face problems with their exports. Quota imposing countries, such as the United States, have introduced stricter requirements for imported textiles.

Indonesian textiles exported to Singapore, for instance, can no longer be reexported by the latter to quota imposing countries by using its quota. (rid)