US manufacturers believe retailers acting out of self-interest

LAHORE: A rift has developed between US clothing manufacturers and American
retailers over a flagship assistance policy for Pakistan, aimed at boosting
the textile industry in conflict-hit parts of the country.

The policy, contained in a bill before Congress, would allow Pakistani
clothing makers in the northern areas of the country to export their
products duty-free to the US, according to a report published in The
Guardian. However, critics say that could come at the cost of American
workers.

American retailers, such as Wal-Mart and Levi Strauss, and brand owners,
together with Pakistani manufacturers, are lobbying to expand the terms of
the initiative. They said the programme was so restrictive in the products
it covered that it was a “hollow gesture” and would not boost the current
$3.1 billion worth of annual textile exports from Pakistan to the US.

The bill, championed by Barack Obama, seeks to provide employment for people
who might otherwise be sucked into the Taliban, which pays handsomely. “If
this [bill] was amended, it could really turn things around in NWFP,” said
Afan Aziz, the chairman of the NWFP wing of the All Pakistan Textile Mills
Association.

Self-interest: However, American manufacturers and unions believe the
clothing retailers are acting out of self-interest. “It’s a flat-out money
giveaway to the retailers,” said Lloyd Wood of the American Manufacturing
Trade Action Coalition. “They will just pocket the duty savings and take
advantage of the 35 cents an hour labour costs [in Pakistan].”

Some 700,000 jobs have been lost in the textile and clothing sector in the
US over the last 10 years and output now stands at historic lows, according
to Wood. He said Pakistan’s current exports to the US would net a saving of
around $100 million a year if the scheme went ahead.