The Hindu Business Line : End of textile quota regime certain

THE imminent end to quota regime in global trade in textiles and clothing now looks a certainty despite the last-ditch bid by low-cost suppliers to spearhead postponement of the Agreement on Textiles and Clothing (ATC) beyond 2004 at the recent Council of Trade in Goods (CTC) meeting in Geneva.

Official sources privy to the final review meeting of the implementation of the ATC at the WTO Council for Trade in Goods told Business Line here that Mauritius presented a post-ATC adjustment-related issues on behalf of co-sponsors Bangladesh, Dominican Republic, Fiji, Madagascar, Sri Lanka and Uganda for the WTO Secretariat to carry out a study aiming at identifying the adjustment-related issues and costs that might ensue with the end of the ATC. They also sought the Goods Council to establish a work programme with a view to finding solutions to the problems identified in the paper with Jamaica and Nepal joining as co-sponsors at the beginning.

Their plea backed by Turkey and Tunisia and a number of other countries centred on the concern over the "sustainability of economic and social development after ATC expiry." They felt that the end of quota regime, while generating opportunities and challenges, would result with "a few enjoying the opportunities and most coping with the challenges."

However, a number of delegations, including India, China, Chinese Taipei, Thailand, Brazil and Cuba said that adjustment costs and challenges were inseparable from trade reform, including in commitments undertaken in WTO Agreements. They pointed out that they themselves have undertaken adjustment and emphasised that in addressing adjustment costs and challenges, the foundations of the rule-based system must not be weakened. The sources pointed out that the apprehensions of the low-cost suppliers enjoying preferential treatment that once the quota regime goes their products had to compete with other efficient and cost-effective suppliers from China and India were the reasons why they sought adjustment cost post-ATC be taken up by the WTO.

The sources expressed surprise that the low-cost suppliers seek a work programme and flexible rules of origin in the WTO to perpetuate their preferential arrangement concessions even after the expiry of the quota regime.

While India and China urged a more active role by the IMF and the World Bank in addressing adjustment issues, Brazil said that even as the textiles and clothing sector is important, its adjustment considerations were not different from those in other sectors. Several delegations including India and Cuba said that members should scan closely the possible implications of the proposal by Mauritius.

India presented the submission of a group of developing country textile exporters which among others said that the Goods Council should take note of the WTO Textile Monitoring Body (TMB) reportand the denial of carry-forward quotas in 2004. They urged members recalling the Doha Ministerial declaration that members should exercise caution before initiating anti-dumping probes on textile sand clothing products previously under quota.