GAP CHIEF BERATES KANTOR OVER GATT APPAREL PLAN

Byline: Jim Ostroff

WASHINGTON — The Gap chairman Donald Fisher, in a meeting with top U.S. trade officials, blasted as “smoke and mirrors” their schedule to integrate apparel over the next 10 years into a quota-free regime under the GATT Uruguay Round.
The retailer argued the schedule would only help domestic manufacturers in an attempt to extend these quotas beyond the 10-year phaseout prescribed by the GATT agreement.
Fisher’s comments were made to U.S. Trade Representative Mickey Kantor and Chief Textile Negotiator Jennifer Hillman last Thursday at a meeting of a presidential trade advisory committee, composed of many top executives and civic leaders.
Both the Gap chief and Linda Wachner, chairman and president of The Warnaco Group, who also attended the meeting, said in telephone interviews they will ask the U.S. to overhaul the phaseout plan in meetings in mid-March. The plan is to be made final by May 1.
Explaining his position, Fisher said he told Kantor and Hillman the U.S. is making “big mistakes” in its proposed three-phase timetable to end the quota protections on the world’s textile and apparel trade. The 10-year phaseout period began Jan. 1.
“In the first phase, which runs for three years, absolutely no import-sensitive textile and apparel products are integrated and now the U.S. has announced a plan for the last two stages in which quotas on 85 to 95 percent of [import] sensitive products will not be phased-out until after the 10th year,” Fisher said he told the trade officials.
Fisher said that the quota phaseout scheme proposed by the interagency Committee for the Implementation of Textile Agreements failed to live up to the spirit of the GATT agreement, which called for 51 percent of textile and apparel products to be made quota-free by Jan. 1, 2002. All quotas would end on Jan. 1, 2005.
“This situation is bad all around,” Fisher said, recalling his comments to Kantor and Hillman. “Quotas cost money and the consumer gets hurt by this. While the domestic industries undoubtedly think the plan is wonderful, near the end of the 10 years it will go bananas. It will go to Congress and ask for an extension of quotas, arguing having to end quotas on 10 years-plus-one-day would be too big a jolt and will harm [domestic] manufacturers.”
Fisher said that Hillman, in response, noted that the growth rate of remaining quotas will be increased by 16, 25 and 27 percent in each respective stage, so that products remaining under quota will no longer be “sensitive,” since imports effectively will double over the decade.
“This is all smoke and mirrors,” Fisher said in response, noting the bulk of this “doubling” is accounted for by products not considered sensitive — important to either importers or domestic manufacturers.
“China and Hong Kong [among the largest shippers of imports] essentially will see no quota growth over the decade,” he averred, explaining China’s average 1 percent quota growth will rise to about 1.84 percent in the last stage.
“But, if Hillman says these products will not be ‘sensitive,’ then why not phase out the quotas before the 10 years are up,” he said, recalling “she had no response.”
Hillman did not return telephone calls seeking comment.
Meanwhile, controversy flared over what some of the meeting’s corporate participants said was an apparent effort by USTR to insure the public would not attend the meeting’s open portion, which followed a confidential session. USTR gave public notice of the Feb. 9 meeting on Feb. 10 in the Federal Register.
The Register, which usually publishes notices the following business day upon receipt, received the meeting notice 75 minutes before the meeting’s start.
Lucinda Sikes, an attorney with the Public Citizen Litigation Group, asserted: “It appears that USTR was intent on preventing interested people from attending this trade meeting… it is not a last-minute thing. They met in a hotel and the [corporate] members had to schedule their trips to Washington long in advance.”
A USTR spokeswoman said: “Our intention was not to keep the public out. We messengered over the notice to the Register on Feb. 7 and don’t know why it was late. Maybe this is explained by the fact that this is the first time [Kantor] opened the meeting to the public.” — Fairchild News Service

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