Pakistan’s textile sector is going through a crucial juncture. In the last year, 100 spinning factories and 500 ginning factories have closed down. The Trans-Pacific Partnership could give regional competitors such as Vietnam and Malaysia which are members advantages in trading with the US, Japan, Australia and other developed member countries.
The biggest threat to Pakistani textiles may come from Vietnam, which is the second largest textile exporter to the US and which will reap the benefits of reduced duties. The textile industry accounts for 60 per cent of Pakistan’s exports. Pakistan’s textile exports fell by nine per cent in the July-December period from a year ago. For the month of December, the decline was 12 per cent from a year ago. The textile industry in Pakistan wants a reduction in electricity tariff, refund on sales tax payments and a reduction of export taxes.
Yuan depreciation in the near term will aggravate the already depressed export situation in Pakistan, making Chinese exports cheap in the European Union and other regions. The textile sector in Pakistan needs to focus on innovation, do higher value addition in their products rather than exporting raw and semi-raw materials like cotton yarn and gray fabric.