According to the program outlined by the ATC, however, with effect from January 1, 2005 the textile trade will come under the auspices of the international tariff and trade regulations, with the result that quota limitations will no longer exist.

To date, 51% of the total import volume, calculated on the 1990 quantity basis, has been liberalized and falls under the scope of the agreement.

Factors likely to interfere in the process of liberalization.

To assess the impact of transferring the remaining 49% of the total textile trade volume under the auspices of the GATT regulations, we have to add safeguards such as the non-governmental organizations (NGOs) into the equation. The protection clause (article 6) included in the ATC agreement allows importing countries to introduce protective measures which leave exporting countries powerless to impose their own countermeasures.

Given the special situation in which the US textile industry finds itself – and this is one area in which experts have predicted a negative impact following on from ATC liberalization – we may expect the USA to apply their protective rights under the terms of the agreement. This is not expected to happen in Europe, as this type of restrictive measure does not tie in with the trade policy stand pursued by the EU. Generally speaking, experience has also shown that safeguarding quotas serves only to postpone necessary adjustment measures but not to replace them. The impending liberalization is an established fact, and every company is under a strategic obligation to accommodate itself to the
situation. However, the more technologically advanced countries are pleading for the stipulation of social and environmental standards to be included in
the WTO regulations. Their reasoning appears logical: Social benefits and environmental protection measures give rise to high costs, the natural result of which is a distortion of the international competitive situation. But the danger also exists that this issue will be abused by protectionist practices, a risk which is further exacerbated by the so called NGOs. These are defined as organizations which are not self-legitimizing and which concentrate initially on issues such as environment, development and human rights. Over recent years, however, these organizations have increasingly wielded influence over other areas such as international trade, foreign investment and international production conditions.

Heading up these NGOs are Greenpeace and Amnesty International, which enjoy greater public confidence than either politics or industry.

The highly advanced media infrastructure allows NGOs to distribute images – largely on TV, over the Internet, and in the mass print media – to appeal to emotions on issues which are generally speaking in
the interests of society. In Europe, particularly, the NGOs have succeeded in stepping into a vacuum and making capital out of the public disillusion with politics, the media and big business. The consequences are already making themselves felt: NGOs are gaining increasing influence with politicians,
and initial proposals have been raised that NGOs should be given a role in international decisionmaking processes.

To summarize, we may safely say that, with the exception of the USA, no protectionist measures are expected to be introduced within the international textile trade. The attainment of environmental and social standards, which primarily from the moral viewpoint are not up for debate, can become an important prerequisite for successful export activity, especially for the developing countries – particularly considering the pivotal position attained on the international stage by the NGOs, which are set to exert increasing influence on corporate and political decision-making.

The liberalization of quotas will bring about a shift in market share.

In any consideration of the impact of liberalization in the international textile trade, a focal role is played by China. Following its accession to the WTO, the gradual liberalization process will also apply to the People's Republic.

Both in the USA and in the EU, it has been very no-ticeable that the substantial growth in the volume of imports from China is far from being matched by an increase in terms of value. Experts anticipate a similar outcome following liberalization in 2005.

The reasons are bound up with a certain degree of saturation in the EU and USA sales markets. It is therefore only by making marked price reductions that additional sales volume can be achieved at the expense of the competition.

Only – nowhere is world trade a one-way street. China has itself made substantial concessions as a result of its WTO affiliation. By 2005, the duty on textiles is due to be reduced to an average of 13%. Non collectively agreed trade impediments such as quantity restrictions on imports and the State's trading monopoly in force to date are also due to be abolished.

China is certain to gain world market share in the low-cost sector. The impact of the PR China can be effectively balanced by high-quality, fashionoriented clothing products.

China itself also provides a sizeable market for this product sector. The marked economic growth in the country is creating an ever bigger consumer strata with considerable purchasing power which is hungry for quality. Today, around 80% of all Chinese textile products are supplied to the domestic market. This figure provides an impression of just what an enormous market volume the PR China represents.

On this subject, there is another issue to be raised. Due to the enormous expansion taking place in the sectors of construction, transport networks and medicine, as well as the introduction of regulations for personal, property and environmental protection, the stage in China is set for a veritable boom in technical textiles. These can only be supplied by manufacturers with the relevant know-how. The significance of China to the textile trade is certain to grow at headlong speed. The consensus among experts is that the PR China will become one of the fastest growing economies in the world over the next ten years.

Know-how will become a passport to success.

The consequences for the international textile Industry, particularly in smaller countries which will struggle to keep pace with China, are clear enough: In terms of mass production, extreme productivity is called for in order to survive ever tougher pricing competition. And in the field of high-quality production, these factors are joined by fashion creativity, versatility and top quality.

In either case, the field of circular knitting is of particular interest. Firstly, circular knitting is undeniably the most cost-effective method of producing textile fabric. Secondly, the elasticity and pleasant wearing properties of the clothing it produces make circular knitting a highly popular
technique. Modern high-tech circular knitting machines of the type manufactured by, for example, world market leader Mayer & Cie., comply with the whole spectrum of requirements imposed on different constructions, structures, gauges and fashion patterning techniques. Know-how in the manufacture of fabrics combined with a future-oriented machine outfit opens up particularly promising future prospects for this sector of the textile industry.

The wide-ranging application field of technical textiles is opening up increasingly to the world of circular knitting. Mayer & Cie. exhibited a
Relanit 0.8 at the ITMA 2003 which is capable of reliably processing threads made of silver, wire, brass, steel, fibreglass etc. to create fabrics, either on their own or in combination with conventional yarns. And fabrics for the building, automotive and furniture industries can also be manufactured using various Mayer & Cie. circular knitting machine types with PES and polyamide yarns.

Textile production under pricing pressure.

The international textile trade is being squeezed by enormous pricing pressure on bulk production, a situation which is certain to be reflected in the individual domestic markets following liberalization. In this situation, cost controlling has to become a priority issue.

In any bulk textile production, yarn has to be the number one cost factor. A high quota of faults re-sults in costly fabric waste, with the result that circular knitting manufacturers generally resort to the use of higher-grade yarns in order to minimize problems such as yarn breakage.

This cost-draining factor sparked the ingenuity of the Mayer & Cie. development engineers as long ago as the nineties, who went on to develop relative movement or "Relanit" technology – a Mayer & Cie. patent. This ensures that the yarn is exposed to far fewer deflection points in the stitch-forming area. This meant far better control of the yarn breakage risk, an outcome which has prompted sale of well in excess of 5,000 circular knitting machines using relative movement technology since 1995. These Relanit knitting machines from Mayer & Cie. exist today in a wide range of model variants for practically every conceivable area of single jersey production. They all share the benefit of reduced yarn costs due to the use of simpler yarn types, and of fewer knitting faults and exemplary fabric quality without compromising high production output.

These benefits made the Relanit 3.2 the highest-performance single jersey knitting machine available worldwide over a period of many years. It has only been overtaken in terms of its performance by the
Relanit 4.0 – presented for the first time at the ITMA 2003.

MCT Relanit technology is now so far advanced that it sets standards of both productivity and economy in the field of single jersey – not just in terms of bulk production, but also for fashion fabrics – whether with or without stripes, or as a mechanical, partially automated or fully electronic machine.

Making use of modern information technology.

Only those who make full use of all available streamlining avenues will survive in liberalized markets. Fully electronic MCT circular knitting machines with individual needle selection (also a Mayer & Cie. patent) are able to adopt any pattern in seconds from the PC or laptop and to start knitting immediately with absolute reliability in line with the pattern. Pattern preparation takes place quickly and simply at the PC using the PIC (Pattern Information Center) software. As well as German and English, this PIC software is also available in French, Portuguese, Spanish, Turkish and Chinese.

The use of MDA (Machine Data Acquisition) permits all the data of relevance for circular knitting operations to be registered. As a standard feature, every Mayer & Cie. circular knitting machine offers the whole range of information on productivity, output, availability and fabric quality – simply and understandably on-screen. If the individual circular knitting machines are networked, MDA provides the circular knitting factory with a comprehensive control instrument.

Competition is the mother of invention. In order to save operating time and in particular also to reduce operating faults and the resulting costly production of seconds and yarn wastage, the development engineers at Mayer & Cie. came up with the control system MCTmatic. This system is designed to automate the major operating and setting steps performed by a Mayer & Cie. circular knitting machine. As the system is self-monitoring, a once defined standard of quality is guaranteed – from the first to the last stitch. The settings can be stored and made immediately available again in the event of a repeat order.

E-business – standard practice in liberalized markets.

As well as the opening up of markets, electronic trade is the second focal topic when it comes to establishing the quality of a totally new multipolar trade system. E-commerce opens up international scope for accessing and approaching open markets, and its effects on world trade will be dramatic.
E-commerce will place a question mark over existing market structures and impose enormous pressure on the liberalization of markets. It offers developing countries an outstanding opportunity to accelerate
the integration of their economies into the international arena.

The faster the spread of electronic trade and the faster the liberalization of markets takes place, the sooner it will be possible for developing countries in particular to participate in the benefits of international digital and physical trade. However, this calls for the digital divide between the industrial and developing countries to first be breached.

Machine manufacturers like Mayer & Cie. will make use of information globalization to secure the local availability of their machines in customer factories. The possibilities available here range from the ordering of spare parts and information regarding delivery capability and delivery periods, through to complete error diagnosis with remote maintenance and repair. The relevant programs are currently already being developed at Mayer & Cie.

A final word

The future will come of its own volition – progress will not. The underlying factor when it comes to securing a successful future is innovation – not only in the technical field but also in the way we think and act. Established, solid suppliers with a long tradition in the textile industry will possibly continue to expand their leading position, while newcomers will have a battle on their hands given the restricted growth in demand in traditional markets. Small countries will lose the battle to compete with big players such as China, India and Pakistan on price alone – their chance lies in playing the quality card, in emphasizing design and delivery reliability – factors which necessitate investment in engineering and logistics.

The future will bear down on us and it will not be possible to hold back the tide of developments. The liberalization of markets is going to happen. Those who trim their sails now with the right strategy for their company and set right investment course will be sailing with the wind behind them from 2005.

Literature references:

This paper uses references from contributions by Sylvia M. Jungbauer and Wolf-Rüdiger Baumann from the Year Book of the Verband Gesamttextil e.V.