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Cablegate: Textiles and Apparel Employment and Production In

This record is a partial extract of the original cable. The full text of the original cable is not available.

UNCLAS QUITO 002943

SIPDIS

FOR STATE EB/TPP/ABT EDWARD HEARTNEY AND PASS TO
COMMERCE/ITA/OTEXA/MARIA D'ANDREA

E.O. 12958: N/A
TAGS: KTEX ECON ETRD EC
SUBJECT: TEXTILES AND APPAREL EMPLOYMENT AND PRODUCTION IN
ECUADOR

REF: STATE 184238

1. Summary. Reftel requests information on the textile and
apparel sectors in Ecuador. Statistical information,
particularly with respect to employment information, is
highly unreliable in Ecuador. In general, textile production
increases appear to have outpaced overall industrial
production growth, with increases in imports and exports in
the sector, but it still accounts for a small share of
Ecuador's total trade. Apparel production has reportedly
fallen during the 2002-03 period, but the local trade
association had no specific data on apparel imports and
exports during that period. In 2002, the estimated formal
employment in the manufacturing sector was 121,000 to
221,000. According to Ecuador's Textile Trade Association,
current direct employment in the textile sector is 25,000,
with an additional 100,000 jobs indirectly supported by the
textile industry. End Summary.

Production
----------

2. According to Ecuador's Census Bureau (INEC), total
industrial production in the country increased from 2002 to
2003 at an annual rate of 3%, from $10,886 to $11,213
million. Ecuador's Textile Industry Association (AITE)
reports that textile production increased from $248 million
to $273 million from 2002 to 2003. However, total apparel
production fell from $19 to $17 million in 2002-03.

Imports and Exports
-------------------

3. INEC reported that textile imports increased by six
percent from 2002-03 ($229 to $244 million in CIF value).
Still, textile imports account for a very small share of
total imports, rising from 3.56% to 3.73% of total imports
over that same period.

4. According to INEC, textile exports (measured in FOB
dollars) grew at an annual rate of 13.5% from 2002-03, though
from a very small base ($66 to $75 million). Textiles' share
of total exports actually fell from 1.31% to 1.24% over that
same period.

5. Figures for apparel imports and exports are not
available, but anecdotal evidence indicates that apparel
imports from Asia have grown significantly in the past
several years, resulting in a drop in apparel production and
employment. It is widely believed that much of the Asian
apparel enters Ecuador informally, without passing through
customs or paying duties.

Employment
----------

6. INEC only reports employment numbers for the formal
sector and suggests that formal employment accounts for only
55% of total employment in Ecuador. In 2002, INEC estimated
the number of persons formally employed in the manufacturing
sector to be between 121,000 - 221,000. INEC statistics do
not break down manufacturing employment by industry sector.
Also, reportedly, much of the employment in the textile and
apparel industry is informal employment. Therefore,
employment estimates in those sectors are highly unreliable.

7. According to AITE, current direct employment in the
textile sector is 25,000. However, due to the potentially
large numbers employed informally, the number could be much
larger. In the past several years, AITE puts annual textile
employment growth at 2.8%. AITE also claims that 100,000
additional indirectly supported jobs are created by the
textile sector. However, there is no data as to where those
indirectly supported jobs can be found. Employment figures
were not available for the apparel industry in Ecuador.

8. The government collects statistics annually, and the
industry collects them sporadically, at best. We do not
expect that statistics will be collected more frequently or
that their reliability will improve in the near future.
KENNEY

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