It's a welcome strategy

In the unsheltered, highly competitive export world, the garment manufacturing countries, among the LDCs, which are deficient in local value addition, critically dependent as they are on imported raw material without having the foundational backward linkages, have to face competition on two fronts: first, from within the fold of developing countries like China and Mexico whose local value addition to their products enable them to price their merchandise competitively vis-a-vis the rest; secondly, the tariffs in the importing countries are discriminatory between export of goods from an LDC and that from a developed country like France.

Set against this backdrop, the leaders of apparel exporters' associations of Bangladesh, Laos, Cambodia, Nepal, Bhutan, Afghanistan and Sri Lanka have issued the Dhaka Declaration affirming their collective resolve to lobby for the passage of the Tariff Relief Assistance for Developing Economies (Trade) Act, 2005 through the US Congress and Senate. The enactment of the law is to ensure preferential market access to products from the LDCs. Overall, the merit of the legislation lies in enhancing the competitiveness of RMG from LDCs as against those from the larger economies in the region. As a result, new investment will be made in the sector increasing opportunities for employment.

Tap here to add The Daily Star as a trusted source

Joint efforts and unified stances on securing the rights for LDCs have much better chances of succeeding than individual country-based approaches made with a cacophony. Commonality of interests and purposes dictate a common platform which is what the Dhaka Declaration has created. Within their Asia-Pacific fold, the LDCs have formed a seven-member committee to adopt a year-long plan for lobbying with the US caucuses for the passage of the bill on preferential treatment.

It may not be quite a cakewalk for the LDCs in the face of a strong US textiles lobby trying to resist the legislation on the ground that it could lead to employment losses in the USA. The LDCs are often advised by US officials not to put all their eggs in the RMG basket but to diversify their exports to take fuller advantage of quota-free regime. Our lobby will have to be forceful enough to win the LDC case in Washington.