GENEVA — Showing that the months-long drive to prolong the phaseout of textile and apparel quotas hadn’t succeeded, members of the World Trade Organization’s Council on Trade in Goods met Friday and reaffirmed their commitment to the Jan. 1 end of the system.
However, delegates acknowledged that the world’s poorest nations will be in a difficult position after quotas are lifted and said they would consider undertaking a study of the effect of the phaseout.
None of the countries present, including representatives from the U.S., India, China, Brazil and Pakistan, as well as the European Union, suggested the body extend the phaseout, which will free the $330 billion global trade system from the restrictions that have governed it for more than three decades.
This effectively douses a key element of a campaign by textile and trade associations in more than 50 countries — which had signed the Istanbul Declaration — to extend the quotas through 2007. The group, which included most major U.S. textile associations, originally had hoped the delay would give more time to small developing nations, many of which are heavily dependent on apparel exports, to prepare themselves to compete directly with the manufacturing powerhouses of China and India. However, in recent months, the coalition of trade associations had focused more on the need for a broad discussion on the negative impact of quota elimination among governments at the WTO level.
The campaign faced a steep hurdle in that all 147 WTO nations would have had to agree to prolonging the quotas.
William Tagliani, a member of the U.S. delegation to the WTO, who helped negotiate the 1993 Agreement on Textiles & Clothing that set up the 10-year quota phaseout — called the end of the restraints a “major accomplishment” of the global trade body.
“The U.S. has, and will continue to, abide by its ATC commitments,” he said.
Similarly, Sun Zhenyu, China’s WTO ambassador, said his country will be pleased to see the end of a system that, he said, has been “disrupted and distorted by the quantitative restrictions in the major import markets over 40 years.”
The ray of hope came from the government of Mauritius’ submission of a proposal on behalf of itself, Bangladesh, the Dominican Republic, Fiji, Madagascar, Mauritius, Sri Lanka and Uganda asking the WTO to conduct a study to assess how the end of quotas will affect their smaller economies. The council did not agree to any specific action during the meeting, but said there would be further consultations on the matter.
India’s ambassador to the WTO, K.M. Chandrasekhare, said his country was sympathetic to the plight of other nations, but added that it was “too early to say what could come out of the consultations.”
Peter Thompson, the EU’s deputy representative to the WTO, told delegates that, while sympathetic, the EU was not in a position to support the suggestions raised by Mauritius.
China’s Sun said any attempt “to turn back the hands of time” and continue to treat the sector as separate from the normal rules is contrary to the aim of the ATC and trade liberalization, and could cause difficulties in the global negotiations. He suggested that the International Monetary Fund and the World Bank would be better positioned to address the concerns of smaller poor countries.
Still, the petitioners claimed to be satisfied with their reception.
“We are pretty happy with the outcome,” Naresh Servansing, Mauritius’ WTO ambassador, said. “I don’t think the WTO could shut the door now.”
The Global Alliance for Fair Trade in Textiles — the main group that had pushed for quota extensions — said it, too, was pleased with the outcome.
“Today was a historic day for millions of textile and apparel workers around the world whose livelihoods are threatened by countries that use unfair trade practices in order to monopolize world trade in textiles and apparel,” the statement said.
Auggie Tantillo, executive director of the American Manufacturing Trade Action Coalition, who was in Geneva last week lobbying on the issue, took as a hopeful sign the fact that the Mauritian government had raised the question of what would happen to smaller nations.
“These countries have forced the WTO to confront the fact there is a problem that can’t be ignored,” Tantillo said.
— With contributions from Kristi Ellis, Washington