GENEVA — Munir Ahmad, executive director of the 24-country International Textiles & Clothing Bureau, has a realistic outlook on the prospects for the December Hong Kong ministerial meeting and the overall Doha Round of world trade talks aimed at further liberalizing global commerce. The Geneva-based ITCB is an umbrella group for developing countries that export textiles and apparel and includes China, India, Pakistan, Egypt and Hong Kong. In an interview, Ahmad shared his views on the subject.
WWD: What are the expectations for textile- and apparel-exporting developing countries for Hong Kong and the Doha Round in general?
Munir Ahmad: Textiles and clothing is a sector which has been under restrictions for so long. People have been fighting until now to lift the quota restrictions. The quotas are now behind us. What is left now is reducing the tariffs and, as you know, tariffs in textiles and particularly in clothing are relatively high. In the European Union, for clothing, they are 12 percent, and in the U.S, about 20 percent; for some items, higher, for some, lower. Therefore, this is the biggest expectation of developing countries in the Doha Round. And, of course, you have tariff peaks, so something has to happen for these tariffs to come down.
WWD: There is no agreement in the talks so far on how to tackle tariff reductions. What would be the best approach to address this issue?
M.A.: The ITCB does not have any agreed position. But the expectation is the tariffs will come down no matter which formula you choose. The tariff peaks will automatically be addressed.
WWD: Is there some concern the removal of the quota regime and the triggering of new safeguards, as in the case of China, that the will is not there by rich industrial countries to go for deep tariff cuts in textiles and apparel?
M.A.: There is plenty of apprehension that, at the end of the day, the EU industry and U.S. industry might make life difficult for EU and U.S. negotiators. However, given the context the negotiations are taking place in, and given also how high tariffs are in these sectors, come what may, tariffs will get reduced.
WWD: What would be a minimum tariff cut that would be satisfactory for your constituency?
M.A.: I would not venture to guess on that. But my own personal point of view is it would have to be at least a 50 percent reduction for the sector.
WWD: Cotton is also a sensitive issue, with West African countries seeking an up-front commitment. And cotton was one of the factors that derailed the Cancún trade summit in 2003. What is your assessment of the cotton dossier?
M.A.: The cotton issue has become an emotional issue and with it is linked essentially the whole context for development. And since this is a sector for which the development of many countries — in particular, African countries — is concerned, there is a great expectation that something in cotton subsidies would have to happen.
WWD: We’re not talking only export subsidies here?
M.A.: The export subsidies are only a minor part of it. It is fundamentally domestic support.
WWD: Are you surprised that the sectorial initiatives to remove all tariffs on textiles and apparel, put forward in an earlier stage of the Doha talks, have evaporated?
M.A.: Given the political sensitivities of the textiles and clothing sector, particularly in the U.S. and the EU, to expect zero tariff on this sector is a bit too optimistic. It could wait until after the Doha Round.
WWD: Many developing countries want to see the round completed next year and failure at Hong Kong could delay the potential benefits. Would failure to get an agreement adversely affect textiles and apparel?
M.A.: The notion of a setback is not being looked at by anyone at all. Everybody is expecting the Doha Round will be concluded successfully by the end of next year. This is what we have been expecting all these years and there appears to be momentum building up and the odds seem to be quite good.
WWD: Recently, 97 industry groups called for separate talks on textiles and apparel that would result in lower tariff cuts than those envisaged under the Non-Agricultural Market Access talks. Any thoughts on this?
M.A.: Most developing countries have been loath to accept a sectorial approach to industrial tariff negotiations, including in the textiles and clothing sector. Most are of the view the best way to address tariff peaks in the sector is through a tariff-cutting formula approach, if necessary supplemented by a sectorial if the cuts under a formula are not enough. The issue of tariff peaks is an important objective for many developing countries.