DEVELOPING NATIONS CRITICISE US TEXTILES INTEGRATION PACE

7:18 AM Mar 9, 1995

DEVELOPING NATIONS CRITICISE US TEXTILES INTEGRATION PACE
Geneva 8 Mar (TWN) -- Third World exporters of textiles and clothing products have criticised as imbalanced and commercially not meaningful the US proposals for the integration of textiles and clothing products into the GATT in terms of the WTO's Agreement on Textiles and Clothing.

The complaint of the Third World countries is in a communique issued by the International Textiles and Clothing Bureau (ITCB), the alliance of Third World exporting countries of textiles and clothing products.

The ITCB communique does not indicate what the exporting members plan to do or could do -- given the terms of the ATC which has left the schedule of integration to be set by the importing countries, setting in effect only the final phase-out date.

The communique is couched in terms of appeals -- about desirability and need for improvements. Under the ATC, importing countries had to bring 16% of their 1990 imports in various product lines in an Annex to the ATC, into the GATT on 1 January 1995, another 17% on 1 January 1998 and 18% on 1 January 2002. All remaining restrictions (along with ATC) are to end on 1 January 2005.

From the beginning, ever since the draft proposals that finally became the ATC were proposed by the then GATT Director-General Arthur Dunkel, it was seen as favouring the US and EU.

But the exporting countries were not united, on this as on many other matters, and the final agreement did little to change the pace which would enable the importers to keep in place 55% of the restrictions until the final minute of the 10-year phase-out.

The US has published its proposals for integration in the second and third phases in the Federal Register and, in the light of the comments received, has to announce its final decision.

The products to be integrated in the first phase i.e. on 1 January 1995 when the ATC came into force was notified by all importing countries by 1 October 1994 (as decided at Marrakesh by the Ministers). The second phase of integration under the ATC begins on 1 January 1998 and the third on 1 January 2002, while the ATC and all restrictions on textiles and clothing terminate on 31 December 2005.

Commenting on the US proposals for the second and third stages of integration of the trade into the GATT system and the phase-out of the MFA and its quotas, the ITCB communique said the proposals were not "well balanced" in that the apparel sector would continue to be "under-represented" in the two stages and the bulk of products would be integrated only at the end of the 10-year transition.

It would be "desirable" to integrate a larger proportion of apparel products in these two stages, the ITCB said.

The integration of the restrained lines (products under quota regimes), the ITCB said, is merely 2.35% and 6.5% in the second and third stages of the total import value in 1990 and is "a very low proportion and deserves to be raised".

The proposed integration will also not be "commercially meaningful" and the final integration will be 48.72% of total imports in 1990 in volume terms, but account for 71.19% in dollar terms.

"This disparity reveals the commercial imbalance of the proposals:"

The trade of developing countries will not benefit from the integration of the three stages to the same extent as that of the industrialized countries, the ITCB further complained.

The integration will represent 25.31% of total imports from developing countries in 1990 in value while the corresponding level for the industrialized countries will be 44.76%.

The ITCB also complained of the "variations" in the level of total imports that the US has reported at different times.

In 1991, the US had notified the GATT secretariat that its imports were 16,000,888 sq.metres equivalent, but adopted a figure of 17,113,148 SME for the first stage and a level of 17,025,194 SME for the second and third stages. The ITCB added: "These imbalances in the integration programmes as constructed are unlikely to encourage a smooth process of industrial adjustment in the United States. It is necessary to provide for increased competition, envisaged in the commitments in Art 1:5 of the ATC, by removing adequate number of restrictions in order to facilitate continuous structural adjustments during the transition period."