Bridges Weekly Trade News Digest • Volume 5 • Number 38 • 6th November 2001
US Textile Makers Attack Accelerated Trade Liberalisation
Responding to multilateral and bilateral initiatives involving the US aimed at speeding up the liberalisation of world textile trade, the US textiles industry, spearheaded by the American Textile Manufacturers Institute (ATMI), as well as several Republican members of the US Congress have criticised developing countries attempts at the WTO to speed up the expansion of textile quotas as well as the granting of additional bilateral textiles preferences to Pakistan.Harbinson’s implementation language found "outrageous"
In a letter to US Trade Representative Robert Zoellick and Commerce Secretary Donald Evans, ATMI criticised the proposed draft Decision on Implementation (see BRIDGES Weekly, 30 October 2001) prepared by WTO General Council Chair Stuart Harbinson as biased since it was committed to developing countries’ demands to accelerate further market access for textiles.
"We urge the US government to continue to reject this concept out of hand," ATMI wrote, while emphasising that the US had so far complied with its obligations under the WTO Agreement on Textiles and Clothing (ATC) which had lead to an increase in US textile imports of 71 percent since the entry into force of the Agreement.According to the ATC, Members have to phase out their quotas on textile and apparel products in three stages with a complete elimination of textile quotas before the end of 2004. At the same time, the Agreement provides Members with a high degree of flexibility on how quickly the elimination occurs. Under the Harbinson text on implementation issues the current schedule would accelerate by modifying the parameters for calculating how much Members’ quotas have to grow from year to year (Tirets 17 & 22).
ATMI also opposes language in the draft Ministerial Declaration that calls for the reduction or elimination of tariff peaks, "in particular on products of exports interest to developing countries" (paragraph 16 of the Declaration). ATMI said that if this was a "signal for others to attack the very few US tariffs greater than 20 percent, we urge you to reject that notion."
A WTO official pointed out that this dynamic had to be seen in a wider Doha-negotiation context, where developed countries did not give up their positions without gaining a trade-off from developing countries in another area, such as on investment and competition . Furthermore, the textiles sector was described as a highly "emotional issue" for some developing countries as for them even just a few percentage points of increased market access to developed countries’ markets could mean a significant gain in domestic income.
In the current debate at the US Congress on whether to grant trade promotion authority (TPA), ie allowing the US President to negotiate trade agreements which the Congress can only reject or adopt, but not amend, several Republicans of the textile caucus indicated that they would only support TPA if the Bush Administration committed itself to not reduce US tariffs on textiles or accelerate the phase-out of US quotas as negotiated in the Uruguay Round.
Large textile package for Pakistan opposed
According to Congressional sources, the above-mentioned Republican Members of the textile caucus — on behalf of their textile constituents — also objected to the proposal of a comprehensive benefits package for Pakistan put forward by the US Administration. The proposal would allow the US President to lower or suspend tariffs on Pakistani textile and clothing exports. In addition, the Bush Administration is expected to issue an executive order shifting up to ten percent of Pakistan’s quotas for 2002 into this year. The package is meant to compensate Pakistan for its efforts in fighting international terrorism.
The EC had agreed a similar initiative with Pakistan in mid-October (see BRIDGES Weekly, 23 October 2001).
"Textile Makers Target Harbinson Implementation Proposal," INSIDE US TRADE, 2 November 2001; "Administration To Lay Out New Textile Benefits For Pakistan," INSIDE US TRADE, 2 November 2001; "European Textiles Industry Seeks Limited WTO Tariff Cut," EUROPEAN REPORT, 3 October 2001; ICTSD Internal Files.