Termination of trade quota is unlikely to result in lower prices for 2005.

Publication: Newsday (Melville, NY)

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COPYRIGHT 2005 Newsday

Byline: Lauren Weber

Jan. 30--Survey the labels on a random handful of garments and they read like a veritable United Nations: a shirt from Bangladesh, a dress from Guatemala, underwear from Mauritius, pajamas from Lesotho and a wool coat from China.

But the number of countries represented in your closet is about to get a lot smaller.

The quota system that regulated -- and restricted -- the flow of imported apparel into North America and Europe expired Jan. 1, three decades after it was established in the internationally negotiated Multi-Fiber Agreement. Now, China -- already the producer of 70 percent of the world's toys and furniture -- stands to become the globe's dominant producer of apparel.

Experts believe China's low labor costs and high-quality manufacturing will help it increase its share of the $500-billion-a-year worldwide clothing business from 17 percent now to 50 percent within three years.

After the changes shake out, some analysts say, U.S. consumers could be big winners. More likely, however, the biggest beneficiaries of this change will be the multinational apparel firms that will gravitate to the cheapest and most efficient factories.

Wall Street analysts and government agencies say retail clothing prices could drop 5 percent to 11 percent as importers -- from name-brand behemoths like Liz Claiborne to the small firms crowded into Manhattan's Garment District -- reap cost savings.

Clothing importers and retailers have justified the expiration of...

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