Textile-exporting nations lose at WTO conference

Textile-exporting nations lose at WTO conference

By Riyadi

SINGAPORE (JP): Textile-exporting countries failed to secure
their interests yesterday at the end of the fourth day of the
inaugural World Trade Organization (WTO) ministerial conference
because developed countries opposed speedy liberalization of
trade in textiles.

All delegation heads from textile-exporting countries urged
the developed countries to open their markets wider for textiles
and clothing imports.

But the developed countries, especially the United States,
Canada and some European countries, used textile issues as a
lever to coerce textile-exporting countries to support their
proposals for new issues to be included in the WTO agenda.

Some delegations have complained about the way the United
States has been pushing its proposals, especially those on core
labor standards, to be included in the WTO draft declaration.

"Developed countries were willing to accept the wording on
textiles provided all countries would not reopen the text (draft
declaration)," said Hong Kong's deputy representative at WTO
Timothy Tong.

He said the wording on textiles in the draft declaration was
not formulated by those with textile interests but by the WTO
secretariat, and therefore it did not represent the interests of
textile-exporting countries.

But Indonesia has not complained about the wording on textiles
in the draft declaration.

"We agree on that," said the Indonesian Ministry of Industry
and Trade's director general of international trade, Anang Fuad
Rivai.

Textiles remains one of the hardest-fought issues at the WTO.
For many developing countries, the prospects of ending the quota
system prompted them to agree to negotiate the new issues of
intellectual property, services and investment at the Uruguay
Round talks.

But two years after the WTO's inception, some developing
countries feel they have been trapped by developed countries.

The executive director of the International Textile and
Clothing Bureau, Sanjoy Bagchi, said the developed countries
should have left the textile business to developing countries,
instead of keeping them out.

He said the developed countries had not been serious about
liberalizing the sector. They only committed to liberalizing the
less-traded products of developing countries.

"Major textile-importing countries should observe not only the
letter of the WTO's agreement on textiles and clothing but also
its liberalization spirit," Bagchi said.

Under the agreement on textiles and clothing (ATC), WTO member
countries are committed to removing quotas, which control a large
portion of the textile trade under the multi-fiber arrangement,
and fully integrating the sector into WTO rules by Jan. 1, 2005.

The textile agreement says the sector will be integrated into
the WTO in four steps. On Jan. 1, 1995, members were required to
integrate no less than 16 percent of the total volume of 1990's
imports; on Jan. 1998, a further 17 percent will be integrated,
followed by 18 percent on Jan. 1, 2002, and the remainder
(maximum 49 percent) on Jan. 1, 2005, when the ATC dissolves.

Since the ATC defines integration percentages in terms of
volume, textile-importing countries are expected to fulfill their
commitments by first integrating products that account for higher
volumes relative to value.

Moreover, each member is given the freedom to choose what
products to integrate, provided they cover at least one product
from each of the four groupings -- tops and yarns, fabrics, made-
ups and clothing.

It is projected that over 80 percent of the so-called
restrained textile items, mostly those produced by developing
countries, will not be integrated into the WTO until the last and
final phase.

"We expect that the multi-fiber arrangement phase-out should
involve commercially meaningful items, and that there should be a
greater discipline in the use of safeguards," Indonesian Minister
of Trade and Industry Tunky Ariwibowo said in his plenary
statement.

Pakistan Minister of Commerce Muhammad Zubair Khan complained
in his statement that textile trade after the WTO's two-year
operation was "more restricted instead of being more
liberalized."

He was also concerned by the United States' introduction of a
new set of origin rules, and the excessive use of safeguard
measures by developed countries against developing countries
which have disrupted trade flows on textiles and clothing.

The United States has enforced its new origin rules since July
1 for a wide range of imported products. The origin of a product
was previously determined according to where substantial
transformation of the product had occurred. But the new rules
confer origin to the country where the product is wholly or
originally produced or assembled.

The tough-talking Malaysian Minister of International Trade
and Industry Rafidah Aziz blasted the United States over its new
origin rules, saying that such action "renders meaningless the
liberalization programs under the ATC". (rid)