ECONOMY

Turkey responds to flow of cheap Chinese textiles by going upmarket, with foreign help

ISTANBUL – Turkey has successfully headed off a flow of cheap Chinese goods by upgrading the quality of its production and raising exports to Europe’s fashion centers, the head of a Turkish textile exporters group said yesterday. Turkey is turning increasingly to high-quality fashion production – working with companies like Tommy Hilfiger «TOM.N,» Lacoste and Benetton – to boost sales in the face of cheap Chinese imports. Despite expectations of a fall after quotas disappeared in 2005, Turkish exports rose 7.5 percent year-on-year in nine months, Suleyman Orakcioglu, head of the Istanbul Ready-Made Garment Exporters Association told Reuters in an interview. The Organization for Economic Cooperation and Development (OECD) had predicted a 25-30 percent fall in Turkish exports after global textile quotas expired. «A miracle came true,» said Orakcioglu, who is a founding member of the 52-nation Global Alliance for Fair Textile Trade. He predicts that the European Union and the United States may take further safeguarding measures against China next year in addition to existing curbs. A pact between Washington and Beijing this month limited Chinese shipments to America in more than 30 clothing and textile categories through 2008. The EU earlier made a similar deal with China for 10 ready-to-wear categories. Despite these curbs, China, with its immense economies of scale thanks to its modern factories and cheap labor, has seen a surge in exports following the abolition of global textile quotas on January 1. Orakcioglu said that not everyone succeeded like Turkish manufacturers, and North African countries lost 30-50 percent of their exports under the flood of Chinese goods. «Taking measures in 10 categories is good but not enough,» he said referring to the EU decision to curb Chinese exports. «The threat from China persist on house textiles and we expect the (European) Commission to make a decision on this,» said Orakcioglu. As the overall price level fell by 25-30 percent in textiles products around the world, the average price of «Made in Turkey» products has increased 18 percent thanks to a concentration on better-quality production with high value-added, he said. As a result, Turkish textiles and clothing exports are expected to hit $19.5 billion in 2005 from $17.6 billion in 2004 and 2006’s goal is $21.5-$22 billion, he said. «Turkey is exporting more fashion. It no longer sets targets for volumes but is entirely turning itself into a producer serving brand names,» said Orakcioglu. He said that Europe’s future in textiles lies in cooperation with Turkey, whose textiles industry is transforming itself with investment from established Italian and French companies.