The Hindu Business Line : Quota extension against free trade, says ICMF

THE domestic textiles trade and industry is up in arms against the attempt by the US textiles manufacturers to rewrite the done deal at the WTO on the textiles quota phase-out by the end of this calendar year.

The move is highly protectionist and against free trade practice, Mr D.K. Nair, Secretary General of the Indian Cotton Mills' Federation (ICMF), said. He described the so-called Istanbul Declaration logic, that accession of China to WTO happened after the Agreement on Textiles and Clothing was reached and therefore the new entrant should not have the benefit of the quota phase-out, as false.

"Everybody knew in 1993-94, when the agreement was being drafted and finalised that China will join WTO sooner or later", he argued. Mr Nair pointed out that the US manufacturers were not asking the quota regime extension for China alone. This they could have asked under the special provision of the accession for China. The blanket extension demand raises the suspicion that they may want the current quota regime to continue to protect their interests.

Interestingly enough, the present quota system is followed by the US manufacturers more as an exception rather than by the rule, he argued.

The regional trade pacts and preferential trade agreements have made a mockery of the quota regime. Imports from those countries, which enjoy preferential trade agreements with the US, do not have to follow the quota restrictions. Thus, quota regime is used by the US manufacturers as a restrictive trade practice and a sort of non-tariff barrier against free competition.

"We will fight the move by the US manufacturers to divide the exporters from developing countries and undermine free trade at all possible fora," Mr Nair said.

G. Gurumurthy from Coimbatore reports: The Indian textile industry is confident that the campaign would be drowned and the quota-free textile and clothing regime will come into being next year as the US Government is committed to support the "WTO regime on free textile trade".

"We are sure, the move is only to pressure the US government in an election year but we are also equally sure that it has no backing of the US government which is committed to the quota-free textile trade under the WTO," said Mr B.K. Patodia, Managing Director of the GTN Textiles Ltd and former chairman of the apex textile mill management body, Southern India Mills Association.

Maintaining that he was yet to have the full details of the deliberations of the June 15 Brazil meeting of members of the Istanbul declaration, which had asked the US Government to seek the postponement of the quota dismantling, Mr Patodia felt that the campaign was being orchestrated from certain textile manufacturing countries including some in the least developed countries. He is of the view that the Government of India and the Indian textile industry are very firm that the phase out of the textile quota regime should be adhered to as decided as per the WTO time frame.