The Hindu Business Line : US textile industry sets off alarm bells

Exporters of readymade garments from India and other developing countries are worried over the possibility of textile protectionism rearing its ugly head, close on the heels of banning of the US government contract on outsourcing job to India and the heat it generated.

New Delhi , June 13

IF outsourcing outcry over the alleged job losses in the US is the flavour of the season, the imminent end to the quota regime governing the global trade in textiles and clothing by the end of this year has provoked another round of unsavoury protests from the US lawmakers and other domestic textile and clothing industry groups.

Sources in the domestic textile industry told Business Line here that recently more than 100 US lawmakers asked the President, Mr George Bush, to come to the rescue of the domestic textile industry by extending his support to the call for an emergency meeting of the World Trade Organisation (WTO) to reconsider the end-of-year termination of quotas for clothing and fabric in the international trade.

They cited the letter from 13 Senate Republicans and 16 Senates Democrats, including the US Presidential candidate Senator John Kerry of Massachusetts, wherein they said that Chinese undisputed hold over global textile and apparel trade would shake the economic and political stability of dozens of struggling nations. "Many of our key allies in the war on terror as well as strategic trading partners will quickly see millions of their workers put out on the street," noted the House letter naming Turkey, Egypt, Indonesia, Bangladesh, the Philippines, Haiti, Mexico, the countries of sub-Saharan Africa, Central America and South America.

Although the Bush Administration has refused to back out from extending the deadline of quota regime beyond 2004 with Mr Chris Padilla, spokesperson for the US Trade Representative contending that the "United States intends to abide by its international obligations - that were negotiated more than a decade ago — to phase out the remaining textile and apparel quotas at the end of this year," US and other industry groups fear that the end of worldwide quotas is likely to cost 30 million jobs in the US, Europe and in a number of developing countries. They say the beneficiary would be China and to a small extent India as the low-cost producers swiftly claim a large share of the global market once the quota-free regime comes into force.

Even as the Bush Administration is unwilling to openly plead for an emergency meeting of the WTO to extend the deadline for ending the quota regime under duress from its own textile lobby and political outfits, exporters of readymade garments from India and other developing countries are worried over the possibility of textile protectionism rearing its ugly head, close on the heels of banning of the Federal government contract on outsourcing job to India and the heat it generated.

Only this February, the International Clothing Bureau (ICB) held its annual meeting in New Delhi, demanding in no unequivocal terms that the developed countries should not extend the deadline to end the multi-fibre arrangement (MFA), a sort of quota regime that is a derogation of free and fair trade principles, governing multilateralism in the post-war period.

But the US textile lobby has launched a rearguard campaign to preserve and expand import barriers, according to Mr Daan Ikenson, a senior policy analyst at Washington-based Cato's Centre for Trade Policy Studies. He said recently a coalition of textile producers filed petitions seeking new restrictions on certain Chinese exports and talk of filing fresh trade remedy measures has been intensified.

Even as the developing countries such as India are hoping that world trade in textiles and clothing would be free once for all, after decades of protectionist exceptions, with textile trade at long last being allowed to enjoy the same rules that govern global trade in other manufactured products, the plea for an emergency meeting of the WTO to extend the end of quota regime in the world's bastion of free trade has made many an exporter of apparel and fabrics worried. The Indian textile industry derived immense satisfaction only recently when representatives of global retail chains such as WalMart came to India to source their wares with bright prospects of expanding their export base in the quota-free regime.