The Hindu Business Line : Quota-free regime promises textile exporters less friction, more gains

AS the preponderant portion of the remaining restrictions in the global trade in textiles and clothing stands eliminated with the European Union (EU), the US, Canada and Turkey having served notifications to the effect to end the quota regime and fully integrate themselves with the free trade dispensation from January 1, 2005, hopes run high among low-cost and value-added textiles and clothing exporters from developing countries.

This is also borne out by an overall assessment by the Textile Monitoring Body (TMB) of the World Trade Organisation (WTO) of the implementation of the Agreement on Textiles and Clothing (ATC), which provided a ten-year transitional period to accomplish the phase-out of quota restrictions. The TMB is a unique body within the WTO framework with ten members being appointed by WTO member governments.

A latest assessment by the TMB circulated to all the WTO members that are party to the ATC, both importers and exporters, shows that the US has thus far integrated less than 20 per cent, while the EU, based on 1995 imports when its membership increased to 15, integrated only 32 per cent till now. Consequently, the amount of restrained trade left to be integrated by the two major trading blocs at the end of the process on December 31, 2004 is 80 per cent and 68 per cent respectively (the large bulk in each case consisting of trade in apparel).

The International Textiles and Clothing Bureau (ITCB) of textile-exporting developing countries, however, recalled that at the very inception of the integration process, the US had declared that it "would ensure that integration of the most sensitive products would be deferred until the end of the ten-year period". Similarly, the European Commission followed a policy in which it "considered appropriate to retain control over quotas with a view to keeping the possibility of using them as a bargaining chip to obtain better market access in third countries."

It is in this light that the ITCB has urged the TMB to bring out these facts to shed light on the pace and progress of the process of the phase-out of quota restrictions. This would also, ITCB said, underscore the desirability of the restraining members taking steps to avoid any rush to alternate methods of protection by their domestic industries, following the abolition of the large bulk of quota restrictions only at the end of the phase-out process.

The TMB has stated some difficulties in understanding the reference to "allegations against restraining countries of backloading liberalisation under the ATC" by recalling that the members maintaining such restrictions have explicitly reaffirmed their commitment to eliminate all those restrictions on schedule.

TMB contends that the disciplines embodied in and the control exercised by the WTO system, the jurisprudence set by the respective panel and Appellate Body reports, which provided exhaustive guidelines to members and established appropriate standards on which the TMB has been able to rely in improving the efficiency and transparency of its proceedings and reports, have remained valid. This would help instilling confidence in the impartiality of the WTO rules among exporters.

As the TMB put it, "the sparing use of the transitional safeguard mechanism should facilitate the full integration of the textile and clothing sector into the WTO system." Low-cost textile and clothing exporters who suffered the pangs of backloaded benefits might heave a sigh of relief over the return to the quota-free regime, trade analysts say.

More Stories on : Textiles | Exports & Imports

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page