May 21, 1991

TEXTILES: NEGOTIATIONS ON MFA EXTENSION PUT OFF.

GENEVA MAY 16 (BY CHAKRAVARTHI RAGHAVAN) – Negotiations over the future of the Multifibre Agreement are to be put off, pending bilateral, plurilateral and multilateral consultations.

A meeting of the GATT Textiles Committee to negotiate an extension of the MFA-4 is expected to be set after these consultations, perhaps after mid-June.

This was reportedly decided Thursday after green room consultations by the GATT Director-General Arthur Dunkel.

The Third World Textile Exporting countries, members of the International Textiles and Clothing Bureau, at their recent meeting in Bali, Indonesia, had decided on a 17-month extension till end of December 1992 of the MFA-4, which is due to expire on 31 July.

They also set conditions for such extension: no new restrictions under MFA during the extended period; no deterioration (in bilateral agreements) of current terms in restraint levels, growth rates and flexibility; and no aggregate or group limits and regional quotas during the extended period.

A meeting of the Textiles Committee had been set for Thursday afternoon where the U.S., EC and other Industrial Nations had hoped for a simple roll-over of the MFA-4.

But in view of the ITCB decision, and with the U.S. Congress due to decide the issue of fast track authority before end of May, it was reportedly agreed at the green room consultations that the Textiles Committee meeting should be put off.

In the consultations it would however appear that the U.S. representative held on for a 29-month extension but that he could recommend a 17-month extension to Washington if that was the consensus. Austria too favoured a 29 month extension.

The EC, Canada, Japan and the Nordics favoured a 17-month extension. The Asian countries said they preferred a 12-month extension but were willing to go on with a 17-month extension if that was the consensus.

The differences over the time seem to relate essentially to the time-horizons participants have in mind over the re-started Uruguay Negotiations and attempts of some of them to force an early conclusion of the Uruguay Round.

Apart from the differences over the time period for extension, the major importing countries reportedly turned down the ITCB conditions for extension arguing that these entailed major modifications in the existing arrangements and were hence unacceptable.