Dáil Éireann debate -
Thursday, 22 Mar 1990

Vol. 397 No. 4

Written Answers. - Clothing Industry.

Michael Bell

Question:

43 Mr. Bell asked the Minister for Industry and Commerce if the clothing industry is at risk because of (a) sterling versus the punt, (b) Third World imports into the EC; his views on the alarming conclusions of the recent European report; his views on the phasing out of the multi-fibre agreement; and if he will make a statement on the matter.

Minister for Industry and Commerce (Mr. O'Malley)

The clothing industry has been facing the challenge of increasing imports from low cost sources for some time. This situation has been exacerbated recently by the exchange rates movements vis-à-vis the UK, our main competitor. However, while the punt/sterling exchange rate, which is largely outside our control, has adversely affected our competitiveness, it must be acknowledged that despite recent increases in our interest and inflation rates they continue to be considerably lower than those of our main competitors.

Because of our longer term commitment as members of the EC to the phasing out of the multi-fibre arrangement (MFA) in the context of the Uruguay Round negotiations, it is inevitable that imports from low-cost sources will continue to increase. However, since the phasing out of the MFA is conditional on the strengthening of GATT rules and disciplines over a time frame yet to be agreed, the industry should be given the opportunity to continue its process of restructuring to enable it to increase its competitiveness and to exploit market niches where it has the advantage of quality, design and quick response to customers' needs.

I can assure you that Ireland will be seeking to ensure that whatever transitional régime is put in place after 1991, when the current MFA expires, will allow for the necessary restructuring of the clothing industry to continue.

The Europen report studied the implications for the Irish clothing industry of the completion of the Internal Market and the longer term phasing out of the MFA. It concluded that the challenges would be particularly important for smaller firms who will face new difficulties in their efforts to survive and expand. The findings of the Europen report are being taken into account in the ongoing refinement of the strategies for the development of the clothing sector.

In this regard, a wide range of measures are in place and are being implemented to address the weaknesses identified in the sector, which include lack of scale, inadequate management skills, lack of attention to marketing and lack of finance. While the support agencies play an important role in helping the industry to develop and expand, in the final analysis much of the initiative rests with the industry itself to exploit new markets and to be competitive on the home market. I am confident that, while there will be significant difficulties to overcome, the Irish clothing industry can meet the challenges ahead with the assistance of the strategies being pursued.