2006 COTE D IVOIRE TEXTILE STATISTICS, ANALYSIS

UNCLAS SECTION 01 OF 02 ABIDJAN 001017 SIPDIS SIPDIS State pass to USTR Carol Miller State pass to /EEB/TPP/ABT Gary A. Clements Pass Commerce/ITA/OTEXA Maria D'Andrea E.O. 12958: N/A TAGS: ECON ETRD KTEX IV SUBJECT: 2006 COTE D IVOIRE TEXTILE STATISTICS, ANALYSIS REF: SECSTATE 114799 ¶1. (U) Cote d Ivoire - 2005 statistics on textile sector, as of 2005 (the last year for which detailed statistics are available): -- Total industrial production was USD 3.4 billion for 2005. -- Textile and apparel's share in overall industrial production is 5.77 percent -- Textile and apparel's share of total Ivorian imports: 0.77% -- Textile and apparel's share of total Ivorian exports: 2.10% -- Exports of Ivorian textiles and apparel to the U.S: USD 203,653 (2005) and USD 428,496 (2006) -- Total employment in the textiles and apparel sector: 5,108 -- Percentage in total Ivorian industrial employment: 2.94% Source: National Institute of statistics- ¶2. (U) In 2006, according to the National Institute of Statistics, production of textiles fell 39.5%, due in large measure to Asian competition. The majority of Ivorian textile production is divided between African print "wax cloth" production (3. 5 million meters per month) and "fancy wax cloth" (higher end African print fabric) production (1.3 million meters per month). A small quantity is produced and exported for jeans manufacture. ¶3. (SBU) In answer to questions posed in para 5 of reftel, on September 20, 2007 Econ LE staff met with Jean Ferbert, Director General of the textile firm TEXICODI, which produces 80 percent of the country's "fancy" grade wax cloth. LES and Ferbert discussed Ivorian textile sector issues, including foreign competition, the role of China in the international textile/apparel market, possible government actions to improve competitiveness of the industry, how AGOA could help, and the future of the industry. -- Concerning foreign competition, Ferbert said that the Ivorian textile sector is facing unfair competition from Asian countries like China and India through counterfeit designs of African-print cloth. Ferbert also alleges Chinese firms "dump" their wares, given the massive discrepancy in the price of imports versus local prints; locally-made fancy wax "pagnes" (cloth for African-style clothing) can be more than 50 percent more expensive than the Chinese equivalent. Ferbert asserted that Ivorian textile companies cannot compete with cheap Asian (largely Chinese) imports, especially as production costs (fuel, taxes) continue to rise. Ferbert also expressed concerns about the sale of smuggled textile products (again, largely Chinese origin) from Nigeria, Togo and Benin through the porous borders of the North on which import duties are not paid, again giving them an advantage over locally produced goods. Ferbert mentioned the growing market for second hand clothes as a threat to the local industry. -- Regarding the role of China in the international textile/apparel market, Ferbert said that the Chinese textile industry's strategy is to control the upstream cotton business, particularly the weaving and spinning sector, in West Africa so as to hedge against the possibilities of trade disruptions, such as dumping or safeguards. He cited the instance of the Malian textile company Comatex, which was acquired by a Chinese company. -- Responding to measures taken by the government to increase competiveness, Ferbert said that the government implemented protection of textile design and copyright to combat counterfeiting with the printing of the manufacturer's name on the product and registration of the industrial design at the Ivorian Office of Intellectual Property (OIPI). Despite these measures importers continue to inundate the Ivorian market with counterfeited textile products. Ferbert also suggested lowering factor costs (i.e. energy and water) as potentially effective means to improve competitiveness. -- Concerning AGOA, Ferbert said better access to the U.S. market could help support the local textile manufacturing sector and support local jobs through sales of local print "pagnes", compensating the ongoing loss of regional market share to Asian competition. -- Regarding the future of the textile industry, Ferbert expressed optimism saying that the country has the potential to revitalize the textile sector. He said Cote d'Ivoire possesses one of the best quality cotton fibers in West Africa, fiber control labs as well as the best designs, colors and variations for local prints ("fancy wax") and well-maintained textile factories, despite the effects of the five-year old political crisis. Judicial system reforms to better protect intellectual property as well as unspecified fiscal support measures would help the sector regain its footing. ¶4. (SBU) Post has not heard of governmental efforts, either ABIDJAN 00001017 002 OF 002 nationally or in conjunction with the West African Customs Union, to impose safeguards or other trade remedies to curb the growth of Chinese exports. Post has also not seen governmental efforts to address workers displaced by foreign competition. NESBITT