COSTA RICAN QUOTA TALKS DRAG ON

Byline: Jim Ostroff

WASHINGTON — Efforts to resolve an underwear quota dispute between the U.S. and Costa Rica continue to be strung out.
Rita Hayes, the Clinton administration’s chief textile negotiator, said Friday she was preparing a diplomatic response to an offer Costa Rica made here Thanksgiving eve to settle the haggling that has gone on for the past nine months. At best, the Hayes note likely will serve as the basis for yet another round of talks in this protracted debate.
The U.S. in March sought to restrain underwear imports from Costa Rica, Colombia, the Dominican Republic, El Salvador and Honduras, claiming these imports were harming domestic production. Although many U.S. brief makers howled they were the major importers of this underwear and thus couldn’t be harming themselves, the U.S. managed to sign pacts with all of these nations, save for Costa Rica. While the U.S. gained control, the pacts gave the countries greatly expanded access to the American underwear market — if U.S. fabrics were used in the hefty additional quantities.
For example, the U.S.’s unilateral quota on Honduran cotton and man-made fiber underwear, category 352/652, was set at just under 6.6 million dozen. When the two sides settled in September, the U.S. set a specific limit (SL) quota for 1996 of nearly 10.1 million dozen, which could use fabric sourced anywhere, and an additional 50 million dozen, called a Guaranteed Access Level (GAL), which requires the use of U.S. fabric cut in the U.S. El Salvador, whose underwear exports were restrained at just under 3.7 million dozen, settled for a specific limit quota in 1996 of 6.6 million dozen, plus a 30 million dozen GAL. By summer, generous underwear pacts were in place with Colombia and the Dominican Republic, as well.
With no agreement on Costa Rica, however, the U.S. quota limit of 14.4 million dozen was reviewed Oct. 16 by the World Trade Organization’s Textiles Monitoring Board. The board voted it would issue “no decision” on the matter, leaving the two sides to work it out on their own at a pre-Thanksgiving parley.
By this time it appeared the U.S. had changed its negotiating strategy of offering outsized quotas to end these disputes. Reportedly, it offered Costa Rica a 40 million dozen GAL, but a regular SL quota of less than half the 16 million dozen underwear it’s been shipping to the U.S. annually. And even this SL had many restrictions. Details of Costa Rica’s response could not be learned, but it obviously ended in no agreement.

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