CLOSE to 2,000 employees will lose their jobs at the Kingston Freezone garment manufacturer, Arh Enterprises, when it shuts down soon, Freezone officials confirmed yesterday.

Like other apparel firms operating in Jamaica, Arh has been hit hard by competition from low-cost Asian producers as well as Mexico with its easy, quota-free access to the US market under the North American Free Trade Agreement (NAFTA).

But Arh, and others, have received another serious, even if expected, body-blow with last December’s expiration of the Multi-Fibre Agreement (MFA), which allowed developed countries to set quotas and tariffs for garment imports, in part to help protect their own industries.

Jamaica and Caribbean Basin producers once thrived under the MFA with generous quotas and other preferential arrangements from the United States, Canada and the European Union.

But these privileges have been whittled away since the early 1990s under pressure from cheap textile producers such as China, Bangladesh, Pakistan and Turkey, who agitated for more market access and for textiles to be brought under the free trade discipline of the World Trade Organisation (WTO).

According to Observer sources, earlier this week the bosses of Arh Enterprises wrote to industry minister Aloun Assamba informing her of their plan to close, but did not say when the process would be completed.

Neither Assamba nor Arh officials could be contacted for comment yesterday, but Robert Stephens, the senior vice-president of the Port Authority of Jamaica (PAJ) who are Arh’s landlords at the Freezone, confirmed that the company has been “gearing down” since last year as the deadline for the expiration of the MFA approached.

The company’s bosses “were having serious concerns about the ending of the multi-fibre arrangement”, Stephens said.

Caribbean Basin countries and their allies in the US textile industry fought a long rearguard, but eventually vain battle, to maintain the MFA. Last night, Peter King, the trade expert who heads the consultancy, Caribbean Textile and Apparel Institute, said the MFA’s passing “is going to severely damage Caribbean Basin producers”.

At its height in the mid-1990s, Jamaica’s apparel industry, which primarily assembled garments cut in the United States for re-export to that country, employed about 25,000. Its exports then were valued at more than US$550 million.

Over the past six years, the industry has lost more than 20,000 of those jobs and by last year, after a mild up-tick in earnings, exports reached about US$170 million.

Scores of companies have pulled out of Jamaica, heading for either Mexico or the Far East. “Even with tariffs, the low-cost countries can easily hurdle them,” King said.

King said that for those firms which remained in Jamaica, they, in order to survive, have to reconfigure themselves to operate in niches outside the reach of the cheap-wage producers, some of which did not adhere to core labour standards.

Said the Port Authority’s Stephens: “Jamaica really is not a low-cost environment in terms of cost of labour.”