TEXTILES: ITCB FOR CONDITIONAL 17-MONTH EXTENSION OF MFA.

May 14, 1991

TEXTILES: ITCB FOR CONDITIONAL 17-MONTH EXTENSION OF MFA.

GENEVA, MAY 13 (BY CHAKRAVARTHI RAGHAVAN) – Third World exporting countries, members of the International Textiles and Clothing Bureau (ITCB), have decided in favour of a conditional extension of the current Multifibre Arrangements (MFA-4) for a period of seventeen months, or the date of implementation of the Uruguay Round agreements, whichever is earlier.

The ITCB members took this decision at the meeting of their council of Representatives in Bali, Indonesia 7-11 May, and a copy of the communique issued by them has now become available here.

The Council session, inaugurated by the Indonesian Minister of Trade, Dr. Arifin M. Siregar, also reviewed the situation of the textile negotiations in the Uruguay Round.

It was addressed by the GATT Deputy Director-General Madhan Mathur, the Chairman of the Textiles Surveillance Body, Amb. Marcelo Raffaelli, and heard the views of representatives of retailers and importers associations on the recent developments in the textile field in their areas.

The decision of the ITCB on MFA-4 means that hopes of the U.S., EEC and other ICs to make the Third World pay a price for enabling the U.S. administration to get its fast track authority, by agreeing to a simple "roll-over" of MFA-4 have received a setback.

The MFA-4 is due to expire on 31 July 1991 and the question of what to do after that date, in the light of the re-start of the Uruguay Round negotiations (where the integration of the trade in this sector into GATT is one of the issues) but without a deadline, has come to the fore.The GATT Director-General Arthur Dunkel, in his capacity as chairman of the GATT Textiles Committee has initiated consultations on the issue and a meeting of the Textile Committee on the future of MFA-4 has been tentatively set for May 16.

In informal "green room" consultations held by him on 25 March, Canada, the U.S. and EC favoured a quick decision for a simple roll-over of the existing MFA-4. The EC favours a 17-month roll-over till the end of 1992, while the U.S. and Canada want (though it has not been officially stated by them) a 29-month roll-over till end of 1993.

The U.S. and EC also had hoped for a simple roll-over decision at the May 16 meeting of the Textiles Committee, before the issue of extension of the U.S. administration's fast-track authority comes up for a floor vote in the Congress.

The Bali meeting of the ITCB Council of Representatives considered the situation of the international trade in this sector, both in terms of Uruguay Round negotiations and future of MFA-4.

On the MFA's future, according to the Bali communique, the ITCB Council decided that MFA-4 should be extended, till 31 December 1992 or the date of implementation of the Uruguay Round whichever is earlier, but subject to three specified conditions:

The importing countries shall refrain from introducing any new restrictions under the MFA during the extended period. Where existing bilateral agreements are extended or renegotiated or where new agreements are entered into, any such agreement may provide for improvements in access for exporters but shall in no case result in any deterioration of the terms now in place including those in restraint levels, growth rates and flexibility.

The importing countries shall not apply aggregate or group limits and regional quotas during the extended period. Where existing bilateral agreements are extended or renegotiated, such restrictions shall be eliminated.

The conditions set would hence involve some kind of renegotiations for a new protocol of extension.

Reviewing the situation of the textile negotiations in the Uruguay Round, the ITCB Council reiterated its commitment to conclude the negotiations successfully and urged all participants to make earnest efforts to complete them as early as possible.

The textile negotiations, the ITCB Council emphasised, "constitute a key element in the negotiations as a whole and the success of the Uruguay Round cannot be attained without full integration of the textile trade into GATT".

The Council concluded that further negotiations in the Uruguay Round textile group should be conducted on the basis of the draft text sent to the Brussels ministerial meeting along with the list of outstanding issues mentioned in that document.

The Council however noted "with serious concern" that the implication of the pace of integration contemplated in the draft text, coupled with the composition of the product coverage listed in annex II of the draft and the growth factors "could possibly be that the bulk of the trade in categories under restraint would not be integrated until the very end of the transition period".

The Council decided "to seek changes and modifications in these and other relevant elements with the objective of phasing out MFA restrictions at an even pace during the transition period that may be finally agreed".

It was also decided to secure "a better definition of the transitional safeguard mechanism and conditions under which it may be applied".