7,000 jobs on the line

Associated Press
24 November 2004

Singapore could lose as many as 7,000 jobs next year when global rules that govern textile export quotas are scrapped, a newspaper reported Thursday.

When the Multi-Fiber Agreement expires Jan. 1, this could spell the end of Singapore’s clothing industry altogether, Edward Ang, president of the Textile and Fashion Federation of Singapore, told The Straits Times.

Since 1974, the agreement has governed the quantity of textiles that developing states can export to richer countries, such as the United States. When the quotas from the cheapest producing nations are full each year, buyers are then forced to source lines from rival sites, including Singapore, even if they are more expensive.

Under the new regime, buyers will be free to source any quantity of textiles from any country. The global shake-up is expected to benefit China, where costs are low but productivity is rising.

Ang told the newspaper the agreement had helped Singapore producers survive by holding back the flood of cost-efficient clothing from China and India.

Although Singapore’s economy is dominated by service industries – which account for three-quarters of gross domestic product – manufacturing makes up much of the remainder. The report said as many as 7,000 workers in Singapore could lose their jobs when the quota regime ends.

“The quotas have helped to keep our operations alive,” Lee Siak Yeow, general manager at a local knitting plant, told The Straits Times.

Singapore’s jobless rate stood at 3.4 percent at the end of September, the latest figure available.

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