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Monday, Sep 13, 2004

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Spanner in the works on textile quota abolition

Anil Sasi

New Delhi , Sept. 12

EVEN as countries like India and China are celebrating the opening up of global trade in textiles and clothing from January 1 next year, a major upheaval could be in the offing with a two-day emergency meeting of the World Trade Organisation's Council for Trade in Goods (CTG) set to consider requests from certain member nations for an extension of quota phase-out deadline by as much as three years.

The meeting, scheduled for October 1 and 2, has been called following requests from countries such as Bangladesh, Nepal, Mauritius and a handful of Least Developed Countries (LDCs), for postponing the deadline, industry sources said. Countries like India, China, Brazil and Pakistan are expected to put up a united stand in the meeting of the CTG against any postponement of quota phase-outs, sources said.

According to sources, the members would also be able to raise concerns on implementation of the quota abolition under the WTO's Agreement on Textiles and Clothing (AT&C), including the issue of adjustment costs following quota abolition. The meeting would focus on a final major review of the AT&C integration process, assisted by a report from the Textiles Monitoring Body (TMB).

Industry sources said the US textile industry associations have repeatedly raised the issue of extending the quota phase-out schedule during the last few years. "Since the WTO is a body of Governments, the US industry seems to have pushed their case through some of the LDCs to be raised at the CTG since they would not be able to make a case for themselves," an industry body member said.

India and China are touted to be among the biggest gainers once the global textile markets open up following the phase-out of quotas. According to a WTO report released last month, China and India were expected to dominate world trade in textiles and clothing starting next year when the US and other industrial countries have to remove restrictions on imports.

The WTO-negotiated agreement will allow producers to export as much as they can sell — and the report contended that this would be a lot more than many developing countries are selling now. However, countries like Nepal, Bangladesh and other LDCs, which depended heavily on the quota regime to draw business from countries like India are bound to be adversely impacted.

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