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SUVA, Fiji (Fiji Times, Feb. 6) – A free trade agreement negotiated between Australia and China will have a severe effect on Fiji's garment industry, says Fiji Textile Clothing and Footwear president Ramesh Solanki.

He warned that if the free trade agreement were signed between Australia and China, Fiji's ailing garment industry would collapse in the coming years.

"The agreement between Australia and China will make it worse, as we already face severe competition from China," Mr. Solanki said, "The textile sector has significantly declined in the past five years in terms of employment and export revenue."

He said the situation was a serious matter for Fiji as the industry provided employment for females from poor education background and will struggle to find job elsewhere if the industry collapsed.

"Any further job losses will have serious social implications and will not help poverty alleviation," Mr. Solanki said.

Garment exports from Fiji have decreased in the past five years from FJ$313 million [US$182.9 million] in 2000 to less than FJ$200 million [US$116.9 million] in 2005 — a decrease of 35 per cent.

Mr. Solanki said the South Pacific Regional Trade and Economics Co-operation Agreement, which was signed about 24 years ago, has not seen any amendment made to allow the country to become more efficient.

"We are working to negotiate with the Government a better trade arrangement under South Pacific Regional Trade and Economics Co-operation Agreement for the Textile Clothing and Footwear sector by way of reducing the local content rules of origin to 25 per cent.

"The 50 per cent rule is too restrictive and does not give us flexibility to source good quality fabrics," Mr. Solanki said.

He said that the South Pacific Regional Trade and Economics Co-operation Agreement - Textile Clothing and Footwear scheme had not worked favorably and the scheme was discriminatory because it excluded wool and wool blend textiles.

Fiji Employers Federation president Sangeeta Niranjan said one of the strongest advantages of operating in China was the abundance of skilled and inexpensive labor.

She said if the negotiations went ahead, the Fiji garment industry would suffer.

She said the long-time competitive advantage of our garment industry as compared to China would have to be re-looked at if Fiji was to sustain employment of thousands of people and the return on investment on garment manufacturing.

Ms Niranjan said China had a Mecca of raw material supply for the world's garment industry from fabric to buttons to labels and zips.

"Once China has a reduced tariff rate, it will be the best country to supply garments to."

Meanwhile, specialist consultant to the textile, clothing and footwear industries Philip Levy from Petersen Levy and Associates will be in Fiji to conduct a seminar on steps to take if the free trade agreement between Australia and China is finalized.

Mr. Solanki said the seminar could benefit the industry, as it would provide a detailed picture of the free trade agreement between Australia and China. The seminar will be held on February 28 in Lautoka and March 1 in Suva.

February 7, 2006

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