CHINA CALLS TURKISH TEXTILES PROPOSAL ‘UNACCEPTABLE’
China strongly opposed a new submission from Turkey on adjustment-related issues in the textiles and clothing sector at a 15 July WTO Council for Trade in Goods meeting. China said that the proposal (G/C/W/522) was ‘one-sided’ and ‘unacceptable,’ adding that Turkey was attempting to make China a scapegoat by using ‘dubious figures’ and hasty generalisations.
The proposal included statistics showing dramatic increases in Chinese exports to major markets. Building upon similar requests made by Tunisia and Turkey at earlier meetings of the group (see BRIDGES Weekly, 22 June 2005), it demanded a Goods Council work programme, as well as a study by the WTO Secretariat, to clarify through statistics and data the current status and trends in the sector. Turkey said this information would help developing countries make their national adjustment and diversification plans.
A Chinese negotiator observed that Turkey’s own textile exports had grown by up to 30 percent in some markets, and that the country had become the second largest supplier to the EU with 14 percent market share. Tunisia, Mongolia, Jordan, Kenya, Sri Lanka and Mauritius expressed strong support for the proposal, while the EU expressed openness to the proposal. Japan argued that any initiative should focus on development concerns and exclude discussions on measures, such as new trade remedies, that would lead to new trade restrictions, a sentiment echoed by Turkey. China’s position, on the other hand, was supported by India, Pakistan, Brazil and Chile.
Members were unable to agree on a work programme or study, but decided to continue discussions on the textile and clothing question. Chair Vesa Tapani Himanen of Finland will hold informal consultations on the matter until the Goods Council’s next meeting on 10 November, during which the issue will be taken up again.
ICTSD reporting; "Turkey’s WTO proposal on textile unacceptable: China," XINHUANET, 16 July 2005; "China Slams Turkish Proposal For WTO Work Program on Textiles," WTO REPORTER, 18 July 2005.
BRAZIL REQUESTS USD 3 BILLION RETALIATION AGAINST US IN COTTON DISPUTE
In a 15 July meeting of the special session of the WTO Dispute Settlement Body, Brazil announced its request for a USD 3 billion retaliation against the US in the recent Cotton dispute (see BRIDGES Weekly, 6 July 2005).
Its 4 July request sought authorisation for countermeasures that correspond with US support to cotton producers that was found to be inconsistent with WTO rules (see BRIDGES Weekly, 9 March 2005). Brazil claimed suspending concessions under the WTO Agreement on Subsidies and Countervailing Measures (SCM) — the agreement that the US was found to be violating — would neither be practicable nor efficient. It therefore requested permission to retaliate under other WTO agreements, namely by suspending concessions under the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) and the General Agreement on Trade in Services.
As agreed upon by the parties in a 5 July procedural agreement (see BRIDGES Weekly, 13 July 2005), the US opposed Brazil’s request, and instead asked for the matter to be referred to arbitration. As per the agreement, at the first opportunity the parties will ask that the arbitrator suspend its work in order for the US to be given time to implement its announced changes to its cotton subsidy programme.
ICTSD reporting
WTO COTTON SUB-COMMITTEE: AFRICA URGES ACTION BEFORE HONG KONG
The WTO Cotton Sub-Committee held its fifth meeting on 18 July. As during the previous meeting, African countries expressed disappointment at other Members’ lack of formal reaction to their proposal for major reforms in cotton trade (see BRIDGES Weekly, 29 June 2005).
They warned that African cotton producing countries would ensure that the issue does not go overlooked at the Hong Kong Ministerial Conference in December. They also called for the upcoming text on "July approximations" of an eventual Hong Kong deal to include greater detail on the treatment of cotton than what was present in the 2004 July Package (WT/L/579). The EU responded that it had submitted a formal proposal in the overall agriculture negotiations that covers cotton, and seeks to expedite the farm trade talks in their entirety. The proposal, however, is yet to be made public.
The US also called attention to measures that it was currently undertaking to comply with the WTO ruling on its illegal subsidies to cotton producers (see BRIDGES Weekly, 6 July 2005).
Upcoming meetings of the Cotton Sub-Committee are scheduled for 30 September, 28 October and 14 November 2005.
Further information on the Cotton Sub-Committee is available at http://www.wto.org/english/tratop_e/agric_e/cotton_subcommittee_e.htm
ICTSD reporting.
NAMA WEEK POSTPONED; WAITING FOR PROGRESS ON AGRICULTURE
The Chair of the WTO Negotiating Group on Non-Agricultural Market Access (NAMA), postponed a week of talks that had been scheduled for 18-22 July. Sources report that Ambassador Stefan Johannesson of Iceland felt that any agreement on NAMA issues was unlikely in the absence of progress in the talks on agriculture.
At the 12-13 July ‘mini-ministerial’ meeting in Dalian, China, Pakistan put forward "some ideas" for bridging the divisions among Members on the formula for reducing tariffs on industrial goods (see BRIDGES Weekly, 6 July 2005). The approach would incorporate the simple ‘Swiss’ formula espoused by several Members, including the US and the EU. Though it would not link a country’s tariff reductions to its own average tariff level, as called for by countries including Brazil, India, and Jamaica, Pakistan suggested associating the formula with coefficients of 6 and 30 for developed and developing countries, respectively. These numbers broadly correspond to each group’s average tariff level. According to a simulation, this would reduce developed country tariffs to 2-3 percent and most developing country ones to between 10-20 percent. With regard to unbound tariff lines, Pakistan proposed marking them up by 30 percentage points from the applied level — i.e., a 5 percent tariff would go up to 35 percent; a 50 percent tariff to 80 percent — before subjecting them to formula cuts.
Many delegations welcomed Pakistan’s ideas as a genuine attempt at compromise. Some developed countries were uneasy about what they saw as a large difference between the coefficients. suggesting that the approach would not lead to meaningful tariff reductions.
Geneva-based negotiators are on ’standby,’ and expect a meeting to be convened as soon as there are any developments on agriculture that might be conducive to progress on NAMA.
ICTSD reporting.