SINGAPORE'S TEXTILES AND APPAREL PRODUCTION

UNCLAS SINGAPORE 001671 SIPDIS STATE FOR EB/TPP/ABT FOR GCLEMENTS STATE PASS COMMERCE/ITA/OTEXA FOR MD'ANDREA STATE PASS USTR FOR CMILLER SIPDIS E.O. 12958: N/A TAGS: KTEX ECON ETRD SN SUBJECT: SINGAPORE'S TEXTILES AND APPAREL PRODUCTION REFS: A) STATE 114799 B) 06 SINGAPORE 3073 ¶1. Post provides the following updated responses to information requested ref A concerning Singapore's textile and apparel industry. ¶2. Statistics: Total Industrial Production: Year USD (million) 2006 152,979 2007H1 n.a. Total Textile/Apparel Production: Year USD (million) 2006 519 2007H1 n.a. Textile/Apparel's share of Imports/Exports (percent): Year Imports Exports 2006 1.49 1.07 2007H1 1.31 0.88 Textile and apparel exports to the United States: USD (million) Year Textile Exports Apparel Exports 2006 5.6 832.6 2007H1 1.3 325.5 Total Manufacturing Employment: 2006 382,200 2007H1 n.a. Textile/Apparel Employment: 2006 8,281 2007H1 n.a. USD Exchange Rate: 2006 1.5336 2007H1 1.5326 Sources: International Enterprise (IE) Singapore, Department of Statistics, and Monetary Authority of Singapore ¶3. Singapore's textile and apparel industry continues to diminish in importance compared to key industries such as electronics, chemicals, and precision engineering. As of 2006, the country's domestic production of textiles and apparel represented only 0.3 percent of total manufacturing output, compared to 1.5 percent in ¶1980. The sector employs about 8,000 workers, 15 percent less than in 2005. Singapore has 615 textile/apparel companies, of which 100 are involved in manufacturing of high-end labels. These manufacturers are subject to zero tariffs under the U.S.-Singapore Free Trade Agreement, which came into effect January 1, 2004. Singapore's textiles and apparel exports to the United States totaled US$838.2 million in 2006, representing an increase of nearly 6.0 percent over 2005, but still 7.0 percent less than exports in ¶2004. ¶4. With government encouragement, the textile and apparel industry has evolved from a low-cost, labor intensive sector (that began to move offshore in the 1980s) into a fashion and design hub. More than 100 home-grown designers and brands currently operate in Singapore. The lifting of WTO textile and apparel quotas in January 2005 has given buyers more leverage to dictate prices to vendors. ¶5. To remain competitive and take advantage of quota eliminations, Singapore manufacturers continue to relocate operations to low-cost neighboring countries, as well as China, South Asia, Central America, and Africa. Restrictions on China imposed by the United States and the European Union have had minimal effect on Singapore companies. Singapore is home to more than 70 international buying houses that source textiles and apparel in South and Southeast Asia worth about US$2.5 billion annually. HERBOLD