The Hindu Business Line : India to oppose extension of textile quota regime

THE US textiles manufacturers are lobbying hard in a Presidential election year with the Bush administration for an extension of the quota regime by another four years, i.e., up to 2008.

The manufacturers have reportedly roped in some 100 Congressional representatives, both from Democrat and Republican camps, to make the US Government call for an emergency meeting of the World Trade Organisation.

The quota regime is set to end on December 31, 2004, and according to World Bank studies, China, India and Pakistan are expected to do better than the existing exporters from the developing world in a more competitive environment.

Mr S.B. Mohapatra, the Union Textiles Secretary, told Business Line that the Government was aware of the gradual build up since the Istanbul Declaration by the textiles caucus. "India will oppose any move to modify or repeal the agreement on quota phase-out worked out at the WTO. The Union Commerce Ministry has been watching the development. Appropriate steps would be taken if it reaches a stage when a meeting of WTO is called on the issue."

Mr Mohapatra felt it was still a long way for the caucus before any worthwhile attempt at changing things could be made. Early this week, the textiles caucus comprising the US manufacturers, and 81 trade associations of 43 exporting countries met in Brussels to chalk out their plans for pushing forward the campaign.

They were successful in sending a letter to the US President by the Congressional representatives claiming that quota phase out would mean job losses both at home and in some of existing beneficiary countries such as Mexico, Bangladesh and Turkey, with whom the US has preferential or regional trade agreements.

So far, the US official stand has been one of adhering to the WTO obligation, which includes quota phase-out of textiles.

He pointed out that if any application comes up at WTO on the accepted agreement on textiles and clothings, it would meet steep resistance.

The primary argument put forward by US manufacturers is potential job loss affecting around 5.30 lakh US workers along with 30 lakh workers in Latin America as also South East Asia. Since 1997, 250 US units have closed shop, throwing some two lakh out of job.

The threat of trade sanctions will slow the shift of production because US retailers, who incidentally oppose the move by the manufacturers, will be unwilling to risk having their goods caught in a trade war on WTO platform, the US Association for Importers of Textiles and Apparel argued.