Jobs at stake as textile firms mull relocation

Manama

Over 6000 employees working in textile companies will lose their jobs soon, as a few export-oriented textile manufacturers will shift their production facility to our neighbouring countries, in the coming months, according to sources.

The termination of Tariff Preference Level (TPL), a provision in Free Trade Agreement (FTA) between the United States of America (US) and the Kingdom, by the middle of 2016 has set the ball rolling for this shift.

As the shipment for every season happens a few months ahead, the garment exporters are gearing up to end the production schedule. 

It means that unless United States government provides a special consideration and help Bahrain with an extension of the TPL, the Kingdom will be helpless in preventing the job loss, the sources added. “Even though the Ministry of Industries is trying hard, there is no end in sight. We will have to move out” the management representative of a leading textile-exporter told DT News.

According to TPL, Bahrain can export up to 65 million square metres of cloth in a year to US without any duty. 

There was confusion between the continuation of FTA and that of TPL. FTA with Bahrain will continue, as is the case with many other countries, but the local textile industry needs the TPL continued to have a strategic advantage vis-a-vis other textile exporting countries especially from Latin America. 

This is because of the geographical proximity such competitors enjoy to the disadvantage of Bahrain exporters who suffer from a handicap of more than 40 days to reach the US market.

Developing countries which enjoy cheap labour-costs and raw-material costs are also in a better strategic position than Bahrain.

These factors have thus prevented Bahrain textile exporters from having a strategic advantage. US allows such concessions to help in the development of local textile industry. 

But even after tremendous growth achieved after the introduction of TPL in the last decade, Bahrain has been able to utilize only 35 pc of its allotted quota. Thus the withdrawal of TPL will be a deathblow to the industry, sources said.

The extension of TPL will help the industry to come of age and create thousands of jobs and will also help more auxiliary industries to spring up and create many more indirect jobs.