GENEVA — Representatives of the Turkish government called for the World Trade Organization to establish a special safeguard measure to protect the market shares of developing nations after the WTO’s 148 members drop textile and apparel quotas on Jan. 1.
The three-page proposal was submitted in a closed-door session Tuesday, and was quickly rejected by major textile exporters China and India, said diplomats who attended the meeting and spoke on the condition of anonymity. Representatives of Morocco, Tunisia, Jordan, Mexico and Peru supported the measure. It called for the creation of “a unique safeguard mechanism that has a self-triggering structure and aiming at smooth functioning of trade in major export markets and avoiding unfair practices,” according to a copy obtained by WWD.
WTO rules allow for safeguard actions on textiles and apparel against China if imports from that nation cause market disruption to other trading partners. Those safeguards can be applied by importing countries to specific categories of merchandise for as much as three years, but require action by the importing nation.
The thrust of the Turkish proposal is to try to preempt the sharp price reductions and intense competition expected to follow the end of the quotas.
A senior Turkish official, who asked not to be identified, said a starting point would be a monitoring mechanism to track price and quantity trends before measures are triggered.
Textiles and apparel accounted for 34.4 percent of Turkey’s merchandise exports in 2003.
Several diplomats said the proposal does not appear to be compatible with the WTO’s norms and could not be implemented in a market economy.
The initiative by Turkey follows another drive spearheaded by Bangladesh, which called for a WTO study on the impact that the lifting of quotas will have on developing nations. Industry experts and executives have estimated that as many as 30 million jobs in the developing world may be jeopardized by the end of the quota system.
Both moves are seen as part of a campaign to try to get exporting powerhouse China to voluntarily limit its exports after Jan. 1. Chinese officials have ruled out voluntary restraints.
At the end of the closed-door proceedings, Hyuck Choi of South Korea, chairman of the WTO Council on Goods, said there was no consensus on how to proceed. He said he will continue consulting with WTO members on the issue until the council’s next formal session on Nov. 11.