The advent of New Year 2005 heralds removal of all quantitative restrictions on international trade in textiles and clothing, but the textile exporters lament that they will not be able to reap the benefits owing to high production costs, social compliance and environmental issues and above all withdrawal of duty concessions in the EU and continuance of the 13.1% anti-dumping duty on Pakistan bedlinen. The free market era should offer good opportunities to expand and grow, but also present serious threats and challenges. Only those will survive who can ensure quality, competitive price and prompt delivery. Pakistan is a single-crop economy depending largely on cotton textiles. Although in the last four years, US$4b of investment has gone into the textile industry for balancing, modernisation and replacement and expansion, it is not certain that sufficient progress has been made, and the industry has become efficient and cost-effective and able to compete in the free market. Investments have been made by large textile groups, but small and medium enterprises ar ex-posed to free market challenges.
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