As many as 10,000 Canadian jobs in clothing manufacturing could be lost under a new tariff regime announced by Prime Minister Jean Chr?tien as part of his G8 agenda to help Africa, the industry warns.
"This is a reckless trade policy," Bob Kirke, executive director of the Canadian Apparel Federation, said yesterday after details of the new program were fleshed out.
Tariffs averaging 19 per cent and quotas will be removed on almost all goods imported from 48 of the world's poorest nations beginning next January, senior Trade Department officials said yesterday.
The provisions apply primarily to clothing and textile imports, which accounted for about $300 million of the $465-million total for Canadian imports last year from the 48 poor nations, said a senior official.
The new trade regime backs Ottawa's contention that giving aid to the world's poor isn't enough, the official added. "By opening our markets to the least developed countries, we are, at the very least, removing a barrier to their access to Canada," he said.
But Kirke argues that huge clothing exporters like China will flood Canada with cheap, job-killing goods simply by trans-shipping them through one of the 48 tariff-free nations.
"I'm being conservative: 10,000 jobs are at serious risk, right now," said Kirke, whose organization represents about 600 apparel manufacturers employing about 100,000 workers.
To help stop illegal shipments, Ottawa is adding $11 million over four years to the Canada Customs and Revenue Agency budget for hiring new staff. Their job will be to certify the origin of goods coming into Canada quota- and tariff-free, officials say.
But that's not enough for a department already stretched to its limits, Kirke said. Ottawa admits it doesn't know exactly what impact the new regime will have, but suggests it will be minimal. "We do not exclude the possibility that there will be some need to adjust to this new competition," the official said.
An internal federal study leaked last winter acknowledged the plan would cost jobs and profits, but suggested the losses could be offset by increased exports. Goods from the 48 poor nations account for only a small fraction of one per cent of Canada's imports, the official noted Friday.
"Our expectation is there would not be a flood," of new imports, he said. "These measures will provide an opportunity for improved trade from these least-development countries."
Thirty-four of those countries are African, although Bangladesh is the largest of the 48 countries involved.
About 150,000 people, mainly in Quebec and Ontario, work in textile and clothing manufacturing. About 1,000 of those jobs are in Winnipeg, with others in British Columbia.
While clothing and textiles are the biggest export sectors for the 48 countries involved in the program, other exports include some petroleum and agricultural goods, including fruits, nuts and vegetable oils.
Part of G8 program
Chrétien announced the new market-access regime Thursday as part of a $6-billion, five-year program by the Group of Eight leading industrialized nations to assist Africa.
In addition to the previously announced $500 million Canada Fund for Africa, on Thursday the federal government also pledged up to $33 million over four years for marketing and E-commerce projects to help the Canadian apparel sector cope with the new competition.
"The measures . . . will help these industries develop innovative approaches and continue to grow and succeed," Industry Minister Allan Rock said late Thursday.
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