non-qualifying third-country textile inputs in the manufacture of AGOA-eligible apparel exports. As a result, only 40 percent of Mauritius’s exports in the “textiles and apparel” category qualify for AGOA benefits.
Current situation of the textile industry in Mauritius
39. Output of the Mauritiantextileindustry, which constitutes about 80 percent of the EPZ, has been declining in the last few years. The knitwear sub-sector has been adversely affected by the delayed resolution of whether garments that are “knitted to shape” qualify for preferential access
Mr. James Y. Yao, Mr. Gamal Z El-Masry, Padamja Khandelwal, and Mr. Emilio Sacerdoti
restructuring committee (CDRC) has been established under the chairmanship of the Managing Director of the Bank of Mauritius to facilitate the restructuring of the debt of viable firms.
The AGOA requirements are also encouraging changes in the structure of the Mauritiantextileindustry. For Mauritius, as a middle-income country, duty-free access of apparel to the U.S. market is subject to a rule-of-origin requirement, namely that Mauritian companies use inputs (yarn/fabric) from the United States or other sub-Saharan African countries. This has slowed down the expansion of
textileindustry will be able to take full advantage of the provisions of AGOA since it will satisfy the rules-of-origin criteria, Furthermore, several amendments to AGOA, signed into law in August 2002, substantially improve the export conditions for beneficiary sub-Saharan African countries.
6. Against this background, the success of the transformation of the economy hinges critically on undertaking necessary structural reforms, while maintaining social cohesion, macroeconomic stability, and external competitiveness . The Mauritian economy’s openness in terms of
The Mauritian economy showed strong performance owing to its sound macroeconomic policies. Executive Directors emphasized the need to remain competitive and address the growing unemployment problem. They commended the efforts to support the developments in financial services, free port activities, and information and communications technology. They appreciated the tightening of the monetary policy and stressed the need to strengthen the financial position and ensure fiscal sustainability. They welcomed the assessment of the effectiveness and efficiency of the IMF, which provided technical assistance to Mauritius.
This Selected Issues paper and Statistical Appendix provide background information and analytical support for key policy issues discussed in the 2004 Article IV Consultation discussions with Mauritius. The impact of the erosion of trade preferences on exports, growth, and employment is assessed under two scenarios—a moderate and an extreme scenario. To quantify the adverse impact of trade liberalization, the paper estimates various elasticities of GDP growth to exports, and unemployment to growth. The paper also analyzes the labor market institutions and low-skilled employment in Mauritius.