1. The document outlines 7 key challenges facing the textiles and clothing (T&C) industry in Latin America following the end of the Agreement on Textiles and Clothing (ATC): price reductions, consolidation, competition from China, use of trade remedies, the Doha Development Agenda negotiations, approaches of multilateralism vs free trade agreements, and new regulatory rules. 2. It recommends closer regional cooperation through initiatives like AFTEX to promote South-South trade, diversification into man-made fiber products, and developing relationships with foreign investors. 3. The rules governing international T&C trade from 2005 under the WTO are described, including provisions for China-specific safeguards and adjustment issues in the

1. T&C Trade Challenges for Latin America The ATC Ended Is T&C a Normal Sector? Presentation by Mr. Matthias KNAPPE ALADI Secretariat Montevideo, Uruguay, 25-26 May 2005

6. T&C Exports from ALADI Countries in 2003

7. US Imports from ALADI 3 year comparison

8. US Import changes from ALADI 2004- 2005

9. US Imports from ALADI in 2004

10. US Apparel Imports by Region Source: OTEXA and emergingtextiles.com

11. US Apparel Imports by Region Source: OTEXA and emergingtextiles.com

13. World Garment Exports: Declining Growth Rates Source: WTO; idea: D. Birnbaum

14. 1. Prices will fall further More supply and quota rents are gone Source: Robin Anson, Director Textiles Intelligence; ITMF, Dresden October 2003; www.textilesintelligence.com and Textile Outlook International No. 110 March-April 2004

15. US Apparel Imports Unit Value Jan 05 to Jan 04 Source: OTEXA China prices down: 9% on average but up to 50% in key products in US (35% in EU)

16. US Apparel Imports Unit Value Jan 05 to Jan 04 Source: OTEXA

17. 2. C ountry & Enterprise Consolidation Source: US Department of Commerce: Report to the Congressional Textile Caucus on the administration’s efforts on textile issues; Washington, September 2002

19. Mega Companies: Global Process for a Dress Shirt Selected by fabric mill & quality is fine Good relationship & good in piece dye Vertical setup by fabric mill Major shirt factory in TAL Cotton Yarn Fabric Garment Retailer Pakistan HK – China OPA Malaysia US Button Label Thread China US China Cheaper & close to factory Supplier nominated by Customer Malaysia Inter- lining Malaysia Or Japan

21. Source: China Customs, 02/05 China’s T-Shirt Exports to the EU in Jan 05

22. US Imports of Cotton T-Shirts Jan 05 – Jan 04 Source: OTEXA

24. Discriminatory Trade Policy Decision Influence Sourcing Decisions Source: USA-ITA

27. But Preferential & Differential Treatment is Equally Important Source: USA-ITA

33. Hubs & Spokes Changes to Hub & Regional Hubs USA CR DR ES G N K S N M L H CAFTA Sub Saharan Africa Mex & CAN What is in it for South America?

35. US Imports from SA: Fibre Composition

36. The Phenomenon: Most Duty-free Access Utilisation is for Cotton Apparel Andean AGOA Jordan CBI World

37. Tariff Peaks for Cotton & MMF Apparel Source: USAID and USITC

39. THANK YOU ! For more information http://www.intracen.org/textilesandclothing Contact: Matthias Knappe , Senior Market Development Officer [email_address]

40. WTO Rules Governing T&C Trade From 2005 Presentation by Mr. Matthias KNAPPE ALADI Secretariat Montevideo, Uruguay, 25-26 May 2005

51. 4.- Understanding changing markets 1.- Sector Strategy Development 2.- Understanding its’ own and competitors’ performance 3.- Developing fabric sourcing skills to become “ full-package”suppliers 5.- Applying e-applications in the T&C sector Implementing tailor- made market penetration approaches in line with buyer requirements New ITC T&C website Workshops Tailored Product & Market Development “ The SHAPE” “ The FiT” Sourcing Guide and database Business Guide in e-commerce for T&C ITC Tailored Consultation What can we do together ? Sourcing Manufacturing Sales (+Marketing, and Services) Inbound Logistics Customs, Import Clearance Outbound Logistics Customs-GSP/Quota Export Clearance Sourcing Manufacturing Sales (+Marketing, and Services) Inbound Logistics Customs, Import Clearance Outbound Logistics Customs-GSP/Quota Export Clearance

52. THANK YOU ! For more information http://www.intracen.org/textilesandclothing Contact: Matthias Knappe , Senior Market Development Officer [email_address]