COSTA RICA UNDERWEAR BEEF WITH U.S. TO GET HEARING BEFORE TRADE PANEL

Byline: John Zarocostas

GENEVA — An international trade panel will examine Costa Rica’s long-running complaint that U.S. import restrictions on cotton and man-made fiber underwear are contrary to global rules.
The decision was made Tuesday, with full agreement of the U.S., during a special session here of the Dispute Settlement Body of the World Trade Organization.
Booth Gardner, deputy U.S. Trade Representative, told officials from more than 100 nations that the U.S. had acted fully within its rights under the global Agreement on Textiles and Clothing (ATC) in taking the safeguard action against underwear imports from Costa Rica.
The U.S. official said the U.S. had gone through the Textile Monitoring Body (TMB) process twice and consulted with Costa Rica bilaterally six times in search of a solution.
Last summer, the 10-member TMB found that the U.S. call of March 1995 on Costa Rica — under which the U.S. unilaterally set quota for the first time on underwear shipments from that country — was contrary to the ATC, as “no serious damage” could be found to justify the transitional safeguard action.
However, the 10-member TMB, which rules by consensus, could not agree that no “actual threat” was posed in the future by Costa Rica.
Trade officials say the panel ruling will be a legal challenge, given the vague nature of the ATC text.
But trade officials from industrialized and developing nations reckon the ruling could improve the operations of the TMB. As one expert put it, to date the TMB has been legally in the dark. Under the DSB guidelines, a panel must rule within six months (three months in urgent cases). Under the new streamlined dispute settlement mechanism of the WTO, a party may contest the findings of a ruling by a panel within 60 days to the highest “appellate body.”

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