Denis Audet, chief author of an OECD report, says Mauritius, Bangladesh, the Dominican Republic and other poor countries that were protected by quotas for decades will have to modernise and go upmarket to survive in the brave new world of 2005 onwards.

After two years' work, his report of nearly 300 pages offers no solace to millions of people sewing cheap shirts in "offshore" quotas on stronger rivals such as China.

"A great deal of workers are scared right now," Audet told Reuters in an interview. "The countries most vulnerable now are the small, developing countries that benefited most from that system.

Fiji, Madagascar and Sri Lanka are among other vulnerable, far-flung nations on the list with the likes of Bangladesh, low cost countries that will be squeezed by China and India, where industry is more advanced and has its own raw materials.

The OECD, funded by 30 mainly industrialised countries to promote free markets, offers broad recommendations to companies and governments in its report, published earlier this week.

Textiles enterprises are told to embrace high technology, go upmarket, develop close ties to retail giants such as US-based Walmart and be agile enough to rapidly satisfy changing demands.

Governments in those countries are told bad roads, railways and ports are a handicap, as are corruption, lack of education, costly phone or Internet bills and water and electricity prices.

"There are no miracles when it comes to giving advice," Audet said in the interview late on Thursday.

The report notes that expensive electricity and scarcity of clean water in the Dominican Republic discourage setting up a yarn-spinning factory. Bangladesh's ports are poor and only 30 percent of the country is connected to the power grid, it says.

The OCED does not attempt to predict potential job losses in developing countries but notes that four million jobs were shed between 1970 and 2000 in the US, Japan, Germany, France and Britain as a result of restructuring in the sector.