East Asian demand holds up

Exports of Thai garments and textile products to East Asia remain healthy, particularly for supplying China's emerging middle classes, according to Dej Pathanasethpong, president of the Thai Garment Manufacturers Association.

"Our textiles and garment products have strong potential in China, Japan and Korea - particularly China, where the middle-income market is expanding rapidly, resulting in increasing demand for Thailand's high-quality products," Mr Dej told a seminar held by the association yesterday in Bangkok.

East Asia, including Asean, could offset shrinking demand from traditional markets. A decade ago, around half of Thailand's textile and garment exports went to the US and Europe, but they have increasingly imported from countries with cheap labour like Vietnam, China, Bangladesh and Cambodia.

Thailand has shipped fewer garments and textiles to these markets every year.

He added that an attempt to create a free trade zone among the three nations of China, Japan and Korea is unlikely to succeed, which could create an opening for Asean and Thailand.

"They will probably seek to access the tax privileges of a free trade zone through Asean and that could translate into our chance," he said.

After a free trade agreement with Thailand took effect early last year, Japan's regulators cut textile imports from China from 77% to 50% of imports to balance Japan's sources of textiles.

Thailand has an 8% share in Japan's apparel import market. Thailand provides about 1.3% of Europe's US$80-85 billion annual imports and 2% of the US's $71-73 billion annual imports.

He added that the position of Thailand's garments in the US and EU had slipped as Thai manufacturers only supply original equipment manufacturer orders, in which it is hard to compete with countries with cheaper labour costs.

In East Asia, Thailand can export its own designs and brands.

But Mr Dej said Thai labour costs remained steady after the oil price crisis put tremendous pressure on manufacturers and on workers' cost of living.

Source : www.bangkokpost.com