Indonesia supports calls for textile quota extension

Indonesia supports calls for textile quota extension

Zakki P. Hakim, The Jakarta Post, Jakarta

Indonesia supported a proposal from a group of developing
countries, which basically aims to extend the current global
textile quota system, a minister said.

Minister of Industry and Trade Rini MS Soewandi said on Monday
that those countries needed Indonesia's support as their exports
relied heavily on textiles.

"Some countries whose key industry is garments like Mauritius
are anxious that they would not be competitive once the quota
system is removed," Rini told reporters on Monday.

Her comments came after a number of developing countries
including Mauritius, Bangladesh, Dominican Republic, Fiji,
Madagascar, Sri Lanka and Uganda proposed that the World Trade
Organization (WTO) study the global impact of phasing out the
textile and garment quota system. There was no indication,
however, whether the WTO would adopt the proposal and commission
a study.

The quota system, which for years has allowed inefficient
producers to enjoy market access particularly in the main U.S.
and European Union markets at the expense of more efficient
exporters, is scheduled to be terminated early next year. The
plan is part of the Uruguay Round treaty on trade liberalization.

There has been fears that more efficient exporters from
textile giants China and India would dominate the global textile
market once the quota system is ended, threatening the economies
of other developing nations like Mauritius and the above
mentioned countries whose exports are heavily dependent on
textiles, accounting for more than 50 percent of their total
export revenue.

Rini said that those countries had only limited resources for
exports, while Indonesia still had numerous other top commodities
to be exported.

"We will at least try to strive for a quota extension," she
said, adding that any extension would naturally benefit
Indonesia.

However, she acknowledged that the chances of a quota
extension were slim as under WTO regulations, as one vote against
the proposal would be enough to end hopes for an extension.

China has been quite outspoken in demanding an end of the
quota system, and it would be unlikely that the textile giant
would back down from its current stance, Rini said.

The Indonesian Textile Association (API) has calculated that
after the quota abolition the Indonesian market share in the U.S.
will be reduced to 2 percent from the current 4 percent.

Meanwhile, API projected China's market share in the U.S.
would triple from 16 percent to 53 percent after the quota
abolition.