GENEVA — The world trading community on Friday lauded the role of the U.S. as the world’s largest importer and main engine of growth, but also voiced concerns over its high tariffs in selected sectors such as textiles and clothing, and that new trade security measures could hinder market access.
This story first appeared in the January 21, 2004 issue of WWD. Subscribe Today.
During a two-day World Trade Organization review of the U.S. trade regime, a cross section of?countries, including China, India and Brazil, acknowledged leadership of the U.S. in the world economy and trade, but also took it to task for sheltering some problematic sectors from global competition.
Linnet Deily, Deputy U.S. Trade Representative, told delegates from more than 100 countries that since the global economic downturn in 2001, “U.S. policies have supported global growth by maintaining its markets largely open and by undertaking strong fiscal action.”
However, during the proceedings, developing countries ganged up on the U.S. over its textiles and clothing regime.
Sun Zhenyu, China’s WTO ambassador, said the U.S. “still maintained tariff peaks and escalations on a number of products.” The Chinese envoy also said “the excessively tight security measures adopted in the trade sphere” have also constituted disturbing barriers to trade facilitation.
Similarly, India in a statement argued some of the recent U.S. security measures “have imposed additional costs on exports to the U.S.” It added that the U.S. container security initiative, which involves prescreening of cargo containers at exporting country ports “may penalize developing countries who may not be able to afford the installation of the required facilities at their ports and thus be unable to join the U.S. initiative.”
But Carlo Trojan, the European Union’s WTO ambassador, said Brussels recognized that the U.S. has every right to ensure that trade regulations do not undermine its legitimate security concerns. But he urged Washington to ensure “that security concerns are not used as an excuse for implementing a disguised form of protectionism.”
In reply to the concerns that U.S. security procedures could become a barrier to trade, Deily said, “I can confirm that President Bush and [Homeland Security] Secretary [Tom] Ridge are sensitive to this issue and fully understand the need to work closely with the international community to ensure this does not happen.”
The Brazilian delegation in a statement said the U.S. maintains a generally open and transparent trade regime, but stressed the U.S. also has an array of tariff and non-tariff barriers that disproportionately affect sectors of interest for developing countries, such as agriculture, textiles, steel and footwear.
“Brazil was among the countries that suffer most from this selective protectionism,” it said.
A report by the WTO secretariat noted that about 31 percent of all tariff items enter the U.S. duty free and that in 2002 the average most favored nation tariff was just over 5 percent. However, certain products, such as peanuts, sugar and certain footwear, receive tariff protection in the 50 to 350 percent range, the WTO said. Moreover, most tariffs on textiles and clothing are in the 15 to 30 percent range,?it said.
India, joined by Indonesia and other Asian nations, complained that to date on textiles, the U.S. has lifted quota restrictions on only about 10 percent of the quotas that were in place in 1990 and argued the remaining 90 percent have been backloaded for the final phase at the end of 2004.
Although technically not a violation, India said, “We believe the U.S. approach goes against the spirit of the Agreement on Textiles & Clothing. We also urge the U.S. to shun a strictly legalistic approach, and consider granting carry-forward and other flexibilities for the year 2004.”
In response to the barrage of over 600 detailed questions, many over peak tariffs, Deily underscored “we have kept our markets open…even as U.S. manufacturing employment declined by 16 percent.”
Turning to textiles, she urged WTO members not to lose sight that the completion of the quota phaseout is 11 months away.
“The benefits for exporting countries has been more than impressive,” the U.S. envoy said. “U.S. textile imports have grown 122 percent since the start of the ATC. This increase in imports has led to intense process of structural adjustment for the textiles and apparel sectors.”
This has included, Deily said, a 42 percent decline in textiles and apparel employment between 1994 and 2002 “for a total job loss of 697,800.”
In a counter salvo to the remarks about high textiles and apparel tariffs, she noted “although this is high compared to our overall industrial average, it is low compared to the rates maintained on textile products in many developing countries.”
Finally, she observed that the ATC provided for the liberalization of import restraints “for all WTO members. The barriers our textile exports continue to face is a severe disappointment for us.”