The real threat to poor countries’ garment industries

A United Nations report revealed real threats to poor countries' garment industries from proposals being discussed by the World Trade Organisation.
The report coincided with growing concerns about imminent loss of AGOA duty-free privileges for a number of African countries.
We believe the short-term threat to African countries is minor, except for Madagascar. Though, as always, we believe predicting the future is something best done by people with crystal balls: our job is to set out future risks and opportunities and give a sense of their relative likelihood and significance.
The threats are long term. AGOA is due to expire progressively over the next six years, and current proposals for its extension are bad news for relatively affluent countries in Africa, like Kenya and Mauritius. They hurt countries like Kenya (practically 100% reliant on sales to the US), though, and have less effect on countries like Mauritius, that depend rather more on sales to the EU, which has no plans for phasing out its duty-free schemes for poor countries.
A bigger threat to all poor countries, however, is spelt out in a little-publicised United Nations report. Plans by the world's biggest economies – the EU, US, China, India and Brazil – to phase out import duties as part of the World Trade Organisation's Doha Development Round negotiations could destroy poor countries' garment industries, the UN report points out. From Honduras, through Kenya to Bangladesh, dozens of really poor countries get their competitive edge over India, Thailand and China by better duty-free access to the EU and/or the US. Eliminate the duties – as India and Brazil argue for – and you make life easier for China.
In the jargon, the problem is known as "preference erosion". But countries like India simply ignore it: they're convinced Western import duties are there to freeze India out of Western markets, so getting rid of those duties must be a Good Thing. In fact, as far as garment making is concerned, there's practically no Western manufacture left to protect: the beneficiaries of Western duties aren't fatcats in Britain, Germany or the US – but garment workers in Guatemala, Kenya and Bangladesh.
Now to get rid of import duty, you first have to get the EU, US, India, China and Brazil to agree on something more substantial than the time of say. And that's something few people ever achieve. Nonetheless, in Geneva this week, trade negotiators are saying they want to wind up their negotiations by the end of 2010.
If that's achieved, and preferences really are eroded, we might be looking at the destruction of all industrialisation in the world's very poorest countries. And sending their factory workers back to being farmers and fishermen.
If you believe the UN