The Hindu Business Line : `US, EU to stick to textile quota phase-out deadline'

THE US and the EU are not backing the move by some least developed countries (LDCs) to stall the abolition of apparels' export quota regime slated for January 1, next year. The new Commerce Secretary, Mr S.N. Menon, told Business Line that both the US and the EU have made it clear they are sticking to the WTO obligation and dismantling of multi-fibre agreement (MFA). He, however, said an extension of quota regime for China for two more years (as it joined the WTO later) is a possibility. The Council for Trade in Goods (CTG) of the World Trade Organisation has met in Geneva on Friday.

The LDCs earlier made an unsuccessful bid through the Mauritius and tried to call an emergency meeting of the CTG to "examine the adjustment costs related to the quota abolition" due to come into effect on January 1, 2005 under the Agreement on Textiles and Clothing (ATC) of 1995.

But, the WTO Director-General, Dr Supachai Panitchpakdi, on August 3 suggested that the regular session of the CTG on October 1, would provide "an opportunity where members could raise concerns on implementation, including those related to adjustment cost issues resulting from quota abolition," according to a WTO communiqué.

Today's CTG meet was for a third and "final review of the ATC integration process, assisted by a report from the textiles monitoring body" for 2002-04, which deals with all relevant issues including transitional safeguard mechanism and quantitative restrictions.

According to textiles industry sources, the US administration, have already started preparation for the phase-out by December 31.

"The US departments have issued relevant circulars to prepare for the change-over and advance apparel import contracts till June 2005," observed Mr Darshan Mehta, President of Arvind Brands Ltd.

According to him, the US retailers and importers have been opposing the move for quota regime extension on cost considerations.

"Some textiles items, which have already been taken off from the quota list, such as bathrobes and bras, have seen a price drop of over 50 per cent for the US retailers, benefits of which are being passed on to the consumers".

Incidentally, the US textiles manufacturers supported the LDCs, particularly those with whom the US has preferential or regional trade agreements, for an extension of the quota regime by another four years, that is, till 2008 end.