ANALYSIS: WTO regime to result in employment losses in textile sector

When the experts claim of huge employment losses in textile sector following conclusion of Multi fiber agreement in wake of WTO regime from January, policy makers are yet to focus on the labour implications of problems in post quota regime, official sources in Ministry of Commerce confirmed on Monday.

Sources in Textile Wing of Ministry of Commerce told The Nation that despite the fact the government had spent Rs 4 billion during last years to meet the challenges of WTO implementation, but unfortunately, the government has yet to focus labour implications, Pakistan might face after the post quota regime.

“Multiplicity of taxes and departments and huge industrial electricity tariffs, which are affecting cost of production, needs to be brought down to a considerable level. These kinds of steps would not only block the threat of unemployment, if any, but would enhance more job openings in the sector,” experts told The Nation.

Experts said that policymakers, FPCCI and researchers should have focused the worsening conditions of workers, especially women, of cotton production sector, “Ignoring them would ultimately harm the textile industry of Pakistan after WTO regime”.

Experts say that loss of jobs is a social problem and we should not see only money and economics because employment loss is a loss of generation and the quota regimes were not blessings and disguise for Pakistan rather a punishment, the experts added.

Dr Karin Astrid Siegmann, researcher of Sustainable Development Policy Institute (SDPI) while sharing her research study on “The Agreement on Textiles and Clothing: Potential effects on gender equality in Pakistan”, told The Nation that increased competition would not only lead to deteriorate condition of female workers in the sector but would also increase the risks regarding their health and safety after change of the textile quota regime from January 2005. She said post quota regime would increase quality of the textile products but may negatively affect female working conditions as 30 per cent female are working in textile and clothing industry of Pakistan.

She said that in the context of “purdah”, a social seclusion of women commonly in Pakistan, female labour market participation would negatively be affected.

Dr Karin was of the views that the full implementation of the ATC in January 2005 represents a quantum leap in the liberalisation of global trade in textiles and clothing. She said the existence of quotas has reduced the supply of these goods in the restricted markets so far and had raised their prices.

She estimated that an average European family loses about Euro 270 a year resulting from the higher costs of textiles and clothing induced by the quota regime (Oxfam International, 2004). On the other hand, the current regime has depressed prices in unrestricted markets as the existence of quotas has diverted some trade to those markets (World Bank, 2004). As the current quota markets are the main global demanders of textiles and clothing, the abolition of the quota regime will lead to a global decrease in prices for textiles and clothing, thus boosting global demand, and intensifying global trade in textiles and clothing.

Dr Karin recommended more stress and implementation of labour standards, enhanced training opportunities for female workers, improved transport to work facilities after post quota era regime.

She said that female rather than male workers would bear the consequences of a potential deterioration of working conditions due to their concentration in units where piece rates and other types of precarious contracts are common. Stressing on labour standards she said to protect workers from harmful consequences of trade intensification was necessary. This, she said, included the establishment of effective enforcement mechanisms to ensure compliance with labour legislation, particularly in ensuring the women workers’ enrolment to a social security system for health, maternity, disability, and retirement benefits. Workers’, especially women workers’, right to organise should be emphasised. She suggested that positive incentives, such as tax cuts or subsidies for those companies that protect workers’ rights were conceivable. “For the industry, it might have the welcome side effects to help ensure quality, and to counter expected NTBs related to poor labour standards” she added.

Displaced women workers have more difficulties in finding job alternatives than men due to their higher concentration in few sectors in the labour market in Pakistan. Thus, to protect women workers from potential long-term job losses, policy reactions should include enhanced training opportunities for female workers. Information centers related to employment opportunities and orders may be established. Besides, the industry’s quality requirements that are likely to increase after the quota regime has been abolished will require better-educated workforce. Human resources development is therefore advocated by the sectoral strategy “Textile Vision 2005”, by the World Bank (2004), and others (e,g. Kazmi, 2002).

It is, however, not reflected in companies’ policies. What is needed is a special focus on female workers due to their greater vulnerability on the labour market.

The experts suggested for the improvement of transport to work, which is necessary to enhance female access to jobs. Given the expressed interest of managers in the textile and clothing industry to have greater access to female labour supply, the industry should take the lead here. This does not only hold true for employment in the textile and clothing industry but for all other types of industrial employment as well.

Vice President of Federation of Pakistan Chamber & Commerce Industry (FPCCI) while expressing satisfaction that there would be no job losses in the textile sector but rather more definite employment opportunities generated after post quota era. Pakistan textile sector was prepared well to meet the challenges.

Criticising some government policies the experts said that lack of coordination, wastage of time, duplication of efforts and isolated directions by various line government departments are threat to face challenges after abolition of textile quotas, needs to be addressed urgently.

Courtesy: The Nation

Muhammad Ramzan Rafique
Muhammad Ramzan Rafique

I am from a small town Chichawatni, Sahiwal, Punjab , Pakistan, studied from University of Agriculture Faisalabad, on my mission to explore world I am in Denmark these days..

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