The discussions prevailed between the textile and apparel manufacturers throughout 2011, have become more severe as additional taxes have been applied on certain textile and apparel products with the Import Regime Decree issued in the Official Gazette dated September 15th,2011. The textile manufacturers created a platform called ‘Turkey’s Manufacturing Turkey’s Export Platform’ and the apparel and clothing manufacturers came together at the platform called ‘Apparel and Clothing Platform’. Both sides continue the debate through incriminating statements.
Abdülkadir Konukoğlu, Sanko Holding Chairman of the Executive Board, Bülent Başer, Member of the Executive Board of Turkish Textile Industry Employers Union and İsmail Gülle, Chairman of İstanbul Textile an Raw Materials Exporters Union (İTHİB), took place at the pres meeting held by the ‘Turkey’s Manufacturing Turkey’s Export Platform’, where the textile manufacturers came together. Abdülkadir Konukoğlu, who was also Chairman of the platform, stated that in his opinion, the anti dumping taxes are favorable for the textile sector. He also drew attention to the declining import figures. “Those who made a fuss about the anti dumping taxes are the ones engaged in imports rather than the ones engaged in exports,” said Konukoğlu.
Importers Make a Lot of Noise, Rather than the Exporters
Stating that they aim to increase the production and employment and to decrease the foreign trade deficit, Konukoğlu said that the additional taxes were applied on the imported textile and apparel products after a detailed research conducted on the issue.Konukoğlu continued by saying; “As a domestic product, you can but a shirt for 50 or 20 YTR, however you can buy it for 10 or 20 YTR if it is a product from Far East. Does this quarrel result from the failure of a couple of manufacturers to earn more income?”
Konukoğlu argued that the ones who perform only imports and make sales in Turkey make a fuss about the issue rather than the ones carrying out imports and exports at the same time. Konukoğlu remarked that they promote the Inward Processing Regime (DİR) and recommend production and exportation rather than performing imports and selling them in the domestic market. “What we oppose is the product that is imported and sold in the domestic market. We have no problem with the garments or fabrics brought in Turkey through export entries,” said Konukoğlu.
The Amount of the Investments Increased by 100 Percent
Bülent Başer, Member of the Executive Board of Turkish Textile Industry Employers Union emphasized that the amount of the textile investments increased by 100 percent. “As the decision entered into force, the sector received USD 700 million within 3 months. Yes, the additional taxes mean more exports and imports. I think that this is the best answer to those who argue that there is not a sufficient production capacity in Turkey,” said Başer.
Başer stated that imports of knitted and woven products declined atfer the additional taxes. However he argued that there is not a shrinkage in the exports. Stating that the amount of the exports Turkey performs – with the products with additional taxes - to the European market has increased, Başer remarked that foreign trade surplus observed in textile is a proof of this increase. “At this stage, the decision taken by the Ministry of Economy, increases the employment, investments and the production. It also allows creating a trade surplus. So what is the reason for this clamour?” said Başer. Arguing that in this positive atmosphere created by the additional taxes, the foreign trade surpluss will reach USD 15 billion in 2012, Başer said that these taxes have not any negative impact on consumer prices.
Let No One Talk on Behalf of the Apparel Manufacturers
Contrary to the arguments put forward by the platform of the textile manufacturers, the Apparel and Clothing Platform painted a picture – with their statements in the opposite direction - in which the sector’s export power and the country’s economy are adversely affected. The protocol of the platform was signed at a pres meeting. The platform includes the signatures of; Hikmet Tanrıverdi, Chairman of İstanbul Textile and Apparel Exporters’ Association (İHKİB), Yılmaz Yılmaz, Chairman of the United Brands Association (BMD), Cem Negrin, Chairman of the Turkish Clothing Manufacturers Association (TGSD), Ahmet Akbalık, Chairman of the Apparel Industry Board, Şenol Şankaya, Chairman of Uludag Textile and Apparel Exporters’ Assocaition, Emre Kızılgüneşler, Chairman of the Aegean Apparel Exporters’ Union, Tarık Bozbey, Chairman of Mediterranean Clothing and Ready Wear Garments Exporters Union, Ali Ulvi Orhon, Chairman of Textile Businessmen’s Association (OTİAD), Gülgün Korkusuz, Head of the Merter Industrialists and Businessmen’s Association (MESİAD) and İrfan Hamaratlı, Chairman of the Turkish Underwear Industrialists Association.
Speaking at the signing ceremony of the platform, Hikmet Tanrıverdi, Chairman of İHKİB, criticised the additional taxes applied on the knitted and woven fabrics and stated that these taxes led to the loss of USD 700 million and that it is necessary to abandon this decision. Tanrıverdi remarked that they established the platform in order to make their own statements heard rather than the other’s. “All the exporter unions and sectoral associations came together and established the apparel platform. From now on, let no one talk on behalf of us,” said Tanrıverdi.
According to the figures reported, Tanrıverdi evaluated the performance displayed by the apparel sector in the exports after the additional taxes. “There has been a decline in the apparel exports. This decline started with 1,8 percent and later reached 2,4 percent. Between December 1st – 20th, this rate amounted to 9 percent. The picture was very good at the beginning of 2011 but as of September, the figures started to decline and almost reached to the level of 2009. When we look at the first ten EU counties, we see that there is a serious decline in especially in our exports to these regions. The falls in EU’s market affect the our sector negatively”.
Remarking that within the last three months a 34 percen decline ocurred in the exports of woven garments, Tanrıverdi underlined that the apparel and clothing exports, which were at the same level before the additional taxes were applied, started to decline after the decision about these taxes was taken. Tanrıverdi also stated that the contraction in the European market has not affacted this decline very much. He added that in September the European market achieved a growth of 1,5 while the Turkish apparel exports declined by 7,1 percent.
Tanrıverdi shared his opinions about the share of the imported textile products in the current account deficit. “In the between January-October 2011, Turkey’s total imports recorded to be USD 201,6 billion while the textile product imports were USD 8,9 billion and woven fabric imports were USD 2,1 billion. The imports of woven fabrics which were taken under protection, reached only USD 2,1 billion. This figure only equals to 1 percent of the 201,6 billion dollars worth of imports recorded between January-Octobed 2011. This shows that the contribution of the measures taken for the woven fabrics is very limited on the current account deficit,” said Tanrıverdi.
Hikmet Tanrıverdi answered our questions about the rumours about ‘the list of the companies that will go bankrupt’ by saying; “This list, which was prepared by heresay information, is a pack of lies. We don’t want this issues to be talked about too much. We’ve made a denunciation against those who spread this list in bad faith. The prosecution office will do what is needed.”
Decreases Our Competitive Power
Yılmaz Yılmaz, Chairman of BMD underlined that the total loss in woven and knitted fabric has reached USD 700 million. “As BDM, we carry our out business with the vision of 2023 and we’ve determined our goals, which include to open 20 thousand stores abroad, to perform 10 billion dollars worth of branded export and domestic production of more than 50 billion dollars. We don’t want to give up but the additional taxes decrease our competitive power compared to the other markets” said Yılmaz.
Cem Negrin, Chairman of TGSD remarked that the additional taxes, applied concurrently with the crisis in Europe, damaged the sector severely and they should be abolished as soon as possible. Negrin argued that a perception of ‘Expensive Turkey’ has been created due to the additional taxes and that the leading brands and purchasing goups started to leave Turkey. We asked Negrin if there is a possibility of a bankruptcy storm to appear in the sector in 2012 and he answered by saying that they expect declines in the companies’ turnovers but no bankruptcies.
