Textile HS codes
Harmonized System Codes (HS Codes) are a government, regulated system used to classify products and their corresponding tariffs. Before exporting your textile goods, you need to determine the HS code that applies to it. The Harmonized System is in short, an internationally developed and implemented commodity-description and coding system, on which the tariffs of most countries of the world (including the NAFTA countries) are based. You can find a list of different Textile HS Codes here.

Textile Agreements in past
MFA(Multi-Fiber Agreement) is an agreement through which a particular country is restricted to export its textile products beyond a certain level to European and US markets. So, a specific quota is fixed for each country, and no country can exceed the quantity assigned. Thus, the motive behind this agreement was to provide a window of opportunity for the under developed and developing economies, or simply to save the interest of the domestic textile industries in the European Union (EU) and the US.

The textile segment has been governed by many agreements since last 30 years. To name a few: the Short Term Cotton Arrangement in th year 1961, the Long Term Cotton Arrangement from 1962 to 1973, and the Multi-fiber Arrangement from 1974 to 1994. It is clear, efforts to liberalise trade and textiles has been tough. The key players from the developed countries took protective measures and made heavy investments in textile, and the result, the developed countries became the most capital-intensive nations within the textile manufacturing segment.

At the same time, developing countries were subject to quantitative restrictions, thus keeping a strong hold on textile exports, keeping the edge by optimum textile production. The MFA was terminated on 31 December 1994, with entry into force of the WTO and its Agreement on Textiles and Clothing (ATC) on 1 January 1995. It was done in order to have a multi-lateral liberal system of trading by terminating quota from textile exports by the end of 2005.


Textile growth figures
If you look at the global clothing scenario, where the textile market stands today is worth more than $400 billion and it is still growing every year. As a result, the recent globalization of the textile trade has opened up highly demanding and evolving requirements for outsourcing in textiles.

During the last quarter of the previous century as depicted from Global Trade Analysis Project (GTAP) model, the share of developing countries in world textile exports improved from 15 to 50 per cent. Costs remain the driving factor in the post-quota world but now the advantage will be greater as retailers are bound to raise the bar higher on the responsiveness and flexibility from their suppliers.

A variety of fabrics are used worldwide in different applications such as apparel, household textiles and furnishings, medical equipment, industrial and technical products. Recent studies have highlighted that fabric weaving alone expends around 28 million tons of fibre every year. This figure is parallel to more than half of the global textile market. It is predicted that global production will grow by 25% between 2002 and 2010, to reach more than 35 million tons and Asia is one of the key regions for growth.


Post Quota Textile Scenario
In 1995, the World Trade Organization (WTO) renewed the MFA with an Agreement on Textiles and Clothing (ATC), which agreed that all quotas on textiles and clothing would disappear between WTO member countries on January 1, 2005.

The expiration of ATC marked the end of quotas, limiting textile and clothing trade between the WTO members. Huge developing countries like China, India and Pakistan were the ones most restricted by the quotas. While India and China are likely to emerge as winners, the main losers after quota will be quota-restricted countries who have enjoyed the benefits and protection for more than 40 years. The fears that prices will fall dramatically after quotas has been eliminated.

The post quota market has changed with producers already affected by changes in retailing. Big retailers are buying up independent brands to give consumers more value and enhance their shopping experience.

Textile manufacturers supplying regional and domestic apparel producers have survived by investing in technology. It allows them to achieve some of the highest productivity in the world. Innovative approach has helped manufacturers to differentiate their products and maintain an edge over competitors.


Competitiveness
Manufacturers in developed countries are more likely to adapt by relocating operations to production centers in low wage countries. Those who choose nearby locations will also benefit from market proximity and speed of response.

Investments in the regional domestic industries have started picking up. The important global players have started taking steps for capacity expansions and modernisation.

Quota elimination has its flip side as well. It will force down clothing prices further and will also help retail buyers to concentrate upon the most competitive suppliers. The focus will be on suppliers in terms of cost, quality and productivity rather than suppliers offering shorter lead times through market proximity.

It will be a race and emerging winners would include companies who will be able to deliver large volumes from integrated structures through partnership and other ventures. The quantum leap in exports of textiles from developing countries occurred despite high tariffs and quantitative restrictions imposed particularly by economically developed countries.

It is important to highlight the role of the multifunctional textiles, intelligent textiles, eco-textiles, e-textiles and customized textiles in the future of the textile-apparel industry.


Moving ahead
The importance of multifunctional textiles has been realized to cope up with the changing face of textile industry. It is the role of multifunctional textiles that seem to hold new challenge and benefit for the future of textile and apparel industry.

Stable location may slowly disappear and the globalization factor may play a major role, building up challenges for companies to upgrade their models and networking. In the due process of globalization, the worldwide textile market looks for stability in the long run. It looks forward to sustainability within the modus operandi of free textile products circulation without any barriers between countries.

It is estimated that developing countries would have an income gain of about USD 24b per year, export revenue gain of USD 40b and employment generation of about 27m jobs in the post-ATC era. However, the textile quota system will hopefully be behind us, effective from January 1, 2006 when the textile sector will be reintegrated into the multilateral trading system.

The elimination of textile quotas in 2005 has opened trade to fierce competition. It has also opened window of opportunities for the countries who rely heavily on this particular sector. However, the benefits for the developing countries may not be spread evenly.

Countries who are more competitive will be able to exploit better opportunities. It would mean having an endemic textile industry. Value added products, and raw material available at home would play a crucial role for exports from developing countries. It also means that in-house productivity will need to be improved with emphasis shifting to quality & to meet timely delivery requirements of the buyers.