Textiles products may not qualify for ASEAN

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)