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Garments industry ’has to wait for gains’

Gulf Daily News, Bahrain

Garments industry ’has to wait for gains’

8 September 2006

Manama: The garments industry may not see the benefits of the new Free Trade Agreement (FTA) with the US until early next year, said an industry leader.

Bahrain Chamber of Commerce and Industry textiles and garments committee vice-chairman Harinder Lamba said that since most companies already have contracts with their US partners until the next season begins in March of next year, they are not yet benefiting.

"The US companies are the ones paying for the duty costs, so they are currently making all the savings," he said.

"But in March, new deals will be made. We could be able to negotiate better prices, which could pass some of the benefits on to us."

Mr Lamba said that the garments industry is expected to benefit eventually though through the 18 to 33 per cent estimated reduction on duties.

Textile manufacturers, on the other hand, will only save seven per cent on duties.

He said that the FTA should allow garments manufacturers to improve their market share, but textile factories may only be able to maintain their current shares.

The apparels industry is Bahrain’s biggest export to the US, making up 70pc of total exports in 2004, ahead of petrochemicals, aluminium and other products.

He said Bahrain should be able to maintain an advantage over other major exporters to the US in the region, such as Egypt and Jordan.

"Under the agreements they have in place with the US, both Egypt and Jordan have to outsource a percentage of their products to Israel. Bahrain’s FTA doesn’t have this clause," he said.