Tariff Remains a Critical Trade Barrier for the Textile and Apparel Sector (Updated December 2017)

textile

clothing

According to latest statistics from the World Trade Organization (WTO), in 2016, the average applied tariff rate remained at 10.5% for textiles and 17.5% for apparel worldwide. Compared with the average tariff rate for all sectors, the tariff rate for textile and apparel is 1.4 percentage points and 8.4 percentage points higher respectively. The result suggests that while tariff may no longer be a critical trade barrier for some sectors, it still significantly matters for the textile and apparel industry.

Least developed countries (LDC) overall set a higher tariff rate for textiles and apparel than other more advanced economies. For many poorest countries in the world, tariff remains the single largest source of tax revenue for the local government. However, it is also true that should these LDCs lower their tariff rate for textile inputs such as yarns and fabrics, it may help apparel manufacturers in these countries lower production cost and improve the price competitiveness of their finished apparel products in the world marketplace.

At the country level, countries with the highest tariff rate for textiles include Bahamas (37.1%), Ethiopia (28.0%), Uzbekistan (24.5%), Algeria (24.0%), Argentina (23.3%), and Brazil (23.3%). Whereas countries with the highest tariff rate for apparel include South Africa (41.0%), Namibia (41.0%), Swaziland (41.0%), Botswana (41.0%), Lesotho (41.0%), Bolivia (40.0%), Egypt (38.4%), Argentina (35.0%), Ethiopia (35.0%) and Brazil (35.0%).

tariff rate

Data also shows that the import tariff rates of the US, EU(28) and Japan, the top three largest textile and apparel importers in the world, stay unchanged over the past three years.

Map_630900_I_

TIC

Additionally, there seems to be a positive relationship between a country’s import tariff rate for new clothing (HS 61 & 62) and used clothing (HS 6309). Of the total 180 countries covered by the International Trade Center (ITC) database, about 62.7% set an equal or higher tariff rate for new clothing than used clothing. Some African nations place a particularly high tariff rate for used clothing, including Zimbabwe (167%), South Africa (149%), Rwanda (117%), Namibia (80%), Tanzania (56%), and Uganda (41%).

Detailed tariff rates in Excel can be downloaded from HERE

Author: Sheng Lu

Professor @ University of Delaware

7 thoughts on “Tariff Remains a Critical Trade Barrier for the Textile and Apparel Sector (Updated December 2017)”

  1. You really make it seem so easy with your presentation but I find this topic to be really something that I think I’d by no means understand. It sort of feels too complex and very vast for me. I am having a look ahead for your next publish, I’ll try to get the grasp of it!

  2. It is interesting to think how much LDCs depend on the tariffs. As mentioned above, in these countries tariffs remain the single largest amount of tax revenue for the local government. This shows how important these tariffs are for LDCs and why they have the highest tariff rate.

    1. but will high tariff rates discourage imports? Isn’t higher trade volumes can help LDCs achieve more tax revenues?

  3. It is very interesting to see how much the LDCs rely on tariffs to keep their economies and countries afloat. The LDCs have the highest tariff rates for both the textile and apparel industries, and large countries like the EU, US, and Japan all have steady tariff rates. This is important information to have when looking at these nations and their prominence in the textile and apparel industry.

  4. I find it very interesting that many African nations are placing a high tariff rate on used clothing. In class, we discussed how African nations want to reduce the amount of used clothing they import so they can increase their own domestic apparel industries. However, because the nations are impoverished, they rely on exporting apparel products to make a living and can import used clothing for their own use, for cheaper. I am unsure if raising the import tariff rate on used clothing will really allow the developing nations to increase their domestic markets.

  5. I think that textile tariff rates for yarns and fabrics in LDCs should be lowered because by doing so this would help apparel manufacturers in these countries lower production cost and improve the price competitiveness of apparel products that they finish in the world marketplace. When LDCs improve this allows more developed countries to improve because it allows for more diverse resources.

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