INFORMATION ON TEXTILES AND APPAREL PRODUCTION

UNCLAS MAPUTO 001233 SIPDIS SIPDIS STATE PLEASE PASS USTR/CMILLER COMMERCE FOR ITA/OTEXA/MDANDREA STATE FOR EEB/TPP/ABT/GCLEMENTS E.O. 12958: N/A TAGS: ETRD KTEX MZ SUBJECT: INFORMATION ON TEXTILES AND APPAREL PRODUCTION REF: STATE 114799 ¶1. The information below is keyed to the questions in reftel, requesting information on textiles and apparel production and employment for Mozambique. Data was provided the Mozambican Ministry of Industry and Commerce, and assumes a 25.45Mtn to 1 USD exchange rate. ¶2. FY 2006 data: -Total industrial production: $1.341bn -Total textiles and apparel production: $5.60mn -Textile/apparel share of host country imports: $56.6m (2.2pct of ttl imports) -Exports in textiles and apparel to the U.S.: $0.7mn -Total manufacturing employment: n/a -Total textiles and total apparel employment: 1245 workers (est) ¶3. FY 2007 (1st Semester): -Total industrial production: $957mn -Total textiles and apparel production: $2.49mn -Textile/apparel share of host country imports: n/a -Exports in textiles and apparel to the U.S.: $0.2mn -Total manufacturing employment: n/a -Total textiles and total apparel employment: 1396 workers (est) ¶4. Additional Information: a. There is only one apparel producer exporting from Mozambique. The producer does struggle with pricing due to international competition; however, the larger hurdles are logistics and non-tariff barriers. There are no Asian investors involved in local production. b. The U.S. and EU restrictions on certain exports of textiles and apparel from China have allowed the one existing apparel exporter to survive. c. The GRM hasn't implemented any safeguards on Chinese textile imports. d. The GRM has no policies in place to deal with dislocated workers in the sector. e. As the sector is so small, global competition has had little effect on local labor conditions, although the private sector as a whole has sought a more flexible labor law. f. The Mozambican government is attempting to improve the business environment and the USG is working closely with the Mozambican government on issues such as infrastructure, bureaucracy, value-added goods, import-export times, etc. The private sector is also very involved, working with the Government on the business environment. Post does think that in the long-term Mozambique will successfully improve its business environment, however not likely soon enough to rescue the nearly-dead textile and apparel industry. g. Mozambique is a partner in AGOA; AGOA has not had a significant impact on the competitiveness of Mozambique,s textile and apparel industry. h. In general, Mozambique is not competitive in the global textiles/apparel sector. Jones