Canadians will be seeing cheaper clothing from the developing world in 2003, as the federal government drops its tariffs on finished goods from those countries.

Last week, Prime Minister Jean Chrtien announced the removal of tariffs on imported clothing from 48 of the least developed countries (LDCs) in the world starting January 2003.

The initiative knocks off the 19 per cent tariff levied on anything from a pair of pants to hats to scarves.

The announcement has the country's apparel industry in an uproar.

"The idea was to help certain African nations foster their industry," Bob Kirke of the Canadian Apparel Federation told CBC News Online. "But the government decided to extend the lifting of the tariff to all the LDCs."

Kirke says the move is a "magnanimous gesture" that looks good on paper but will have a devastating effect on the Canadian apparel sector.

"We have no argument with helping those few African nations, but this gesture has the effect of actually helping countries like Bangladesh," says Kirke.

'It's difficult to isolate nations'

Bangladesh accounts for three-quarters of the apparel imports from the least developed countries. It already has the factories and equipment to produce goods. By extending the tariff lift to all other countries, fledgling African manufacturers will be forced to compete with Bangladesh.

Kirke says the federal government should have adopted a more detailed strategy.

"Look at Lesotho (in Africa). The Bay was recently criticized for importing clothing from that country because it uses child labour and has a bad human rights record," says Kirke. The new policy would give Lesotho favoured status.

  • Canada exports $2.8 billion to the U.S.
  • Canada imports $1.2 billion from China
  • "It's very difficult to isolate nations," Thomas told CBC News Online. "By restricting it to five countries, what arguments would you make for keeping out the other 42?"

    At the root of the CAF protest is a concern that 10,000 jobs could be lost at small and medium-sized companies. More than 100,000 Canadians are employed at 2,000 apparel manufacturers.

    Bob Silver of Western Glove Works in Winnipeg says the new tariff policy wiill make it more cost effective to produce goods outside of Canada.

    "I could take a fabric from France, send it to an LDC, and then bring that garment into the country with no duty," says Silver whose company makes jeans and outerwear. "If I want to bring that fabric into Canada and produce it, I'd have to pay for it."

    Silver says another effect could have other countries using the 48 LDCs as fronts to move clothing through to Canada duty-free.