Lesotho textile industry shuts down

Tiny moun­tain­ous Lesotho has high, dry val­leys, some sheep, a small num­ber of tourists and some excess hydro pow­er it can sell to South Africa, which com­plete­ly enclos­es its bor­ders. Lesotho was deceived by dis­tort­ed trade reg­u­la­tions into wel­com­ing tex­ile indus­try investors who were there for the short term. The country’s offi­cials thought that with duty-free access to the high­ly pro­tect­ed US tex­tile mar­ket as an African least devel­oped coun­try, it might have a chance of sus­tain­ing a tex­tile indus­try. So in 2000 it wel­comed Tai­wanese investors who brought machin­ery, the yarn, the fab­ric—the lot—to the tiny king­dom. Why? All they want­ed was an African cer­ti­fi­icate of ori­gin, their lais­sez pass­er under the MFA quo­ta sys­tem to the high-priced US mar­ket. But the end of tex­tile quo­tas in the US, Europe and Cana­da on 1 Jan­u­ary this year, and the start of mar­ket com­pe­ti­tion for trade, has end­ed the Lesothan dream in a cold (com­pet­i­tive) show­er: bq. “Giv­en the end of quo­tas and the WTO allow­ing Chi­na and India back into the mar­ket [unre­strict­ed, except by gen­er­al rules and dis­ci­plines embod­ied in the mul­ti­lat­er­al trad­ing sys­tem], we believe most of the for­eign-owned tex­tile com­pa­nies in Lesotho will relo­cate back to their orig­i­nal coun­tries. They were in Lesotho to utilise AGOA and [get around] those ATC quo­ta restric­tions,” Lebakae explained. “All these com­pa­nies come from the East, as does the fab­ric and the yarn used in Lesotho.” (“Reuters”:http://www.alertnet.org/thenews/newsdesk/IRIN/16458999d4cfb970804b7e812620adce.htm)

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