Outlooks about the effects of quota elimination varied at this past February's ASAP Global Sourcing Show in Las Vegas, where apparel manufacturers expressed a mixture of satisfaction, frustration and fear on the subject.
Steve Chan, representing a firm with three apparel factories south of Shanghai, said his company has a lot of confidence about growing its business in the United States, but worries that ongoing quotas could cause buyers to pay more for some products. The 30-year-old company, which produces shirts, sweaters and sleepwear, is eager to establish direct sales with U.S. companies, Chan said, whereas before it has relied on trading companies to export its products. It is ramping up production with the opening of a 20,000-square-meter facility this year.
Lulu Liu, U.S. representative for Hong Kong-based Alliance One Ltd., which produces in factories in China and the Philippines, said "nobody is sure" if China will be under quota protection after 2004. The health of the U.S. economy is of greater importance to Alliance One, which offers pants made of remin cotton, a linen-like fabric not subject to quotas. The company also produces pants, skirts, dresses and jackets.
Edward Zhou, manager of Dragon Crowd Garment Inc., a producer of woven tops, sweatshirts and cargo pants with headquarters in the seaport city of NingBo, China, said he wants to find customers who are interested in paying higher prices for more complex garments. The 7-year-old firm is expanding from 500 to 700 employees in the next year, Zhou said.
Indian manufacturer Chandran Baloo said quota elimination is good for his polo shirt business, Bangalore-based Yetticate Exports. With a new factory coming on line in August, the company is increasing its capacity by five times, from 3,000 shirts daily to 15,000 daily, and its number of employees from 300 to 1,100. Quotas "tied down" Yetticate's ability to offer products in a wide price range, he said, because it was advantageous to offer only higher-priced goods, the first to be allocated quota by the Indian government. "Now we can do more less-expensive lines," he said.
Juan Carlos Restrepo of Colombian bottoms manufacturer C.I. el Global S.A., said the end of quotas on Chinese exports is "supposed to be like a bomb GÇª it's going to be a disaster," adding that it is "not healthy" for the United States to have great reliance on Chinese imports.
Hugo Wang, merchandiser for Taiwan-based UKL Enterprise Co. Ltd., showing seamless tops and polar fleece pullovers with jacquard front pocket pouches, said the elimination of quotas is difficult because it is pushing down prices for his firm.
Jack Kipling, chairman of the Export Council for the Clothing Industry in South Africa, said that with the clock ticking away toward global quota removal, South Africa is pushing hard to forge a free trade agreement with the United States, or at the least, an extension of AGOA with benefits for using South African and U.S. fabrics.
ASAP Global Sourcing Show founder Frank Yuan said without quotas, "It's going to be like the wild, wild West," with apparel manufacturers offering aggressive pricing and higher levels of service to win business.