8:09 AM Sep 13, 1996
DEVELOPING COUNTRIES TURN DOWN NEW EU DEMANDS
Geneva 13 Sep (Chakravarthi Raghavan) -- Major developing countries, exporters of textiles and clothing products, have refused to provide new or additional market access to the EU as a price for the implementation of the Agreement on Textiles and Clothing (ATC) for liberalising and integrating this trade into WTO/GATT. The ATC provides, over a 10-year period, for liberalisation and integration of this trade, restricted in a discriminatory way for over 30 years by derogations to GATT, and for automatic end to the ATC which provides for transitionary provisions. Even during the Uruguay Round negotiations, at the concluding stage, developing countries were being pressed by the US and EU to make specific concessions and provide liberalised market access to exporters from the US and EU in this particular sector as a price for phasing out the MFA. This was rejected by the major developing countries who pointed out that they had received no compensation for the discriminatory derogations and safeguards from GATT rules, and had paid a price through the quota regimes and that there was no reason to pay a second price for removal of the restrictions. After an eye-ball-to-eye-ball confrontation, the US which threatened to block the Round outcome gave way and a vague formulation of all parties taking such actions as may be necessary to abide by GATT 1994 disciplines, in terms of the integration process and specific commitments were written into the ATC. But faced with the criticism of the failure of liberalisation in the first phase (whereby the EU only 'integrated' non-restricted trade), the EU's Commission had proposed in February this year to its Council of Ministers for authority to seek 'additional market access' in order to make a more meaningful integration. These were to have been 'over and above' the market access concessions undertaken by the developing countries in the Uruguay Round. But the developing countries in the International Textiles and Clothing Bureau (who held a seminar in February at Brussels along with the EU's Foreign Trade Association) reacted very strongly against the EU move for 'reciprocity'. The idea was further discussed at the ITCB's Bangkok meeting where the participants said that they had already made commitments in the Round at considerable cost to their economies, and these were already starting to be implemented from day one of the WTO (1 January 1995). The EU was now demanding additional commitments from the developing countries to enable the EU to implement its own WTO commitment. This was totally inconsistent with the objectives of the Uruguay Round, namely dismantling of the MFA restrictions. The demand was "preposterous" and the developing country exporters refused to accept any additional demands. Besides this demand from the EU, in the context of the Singapore Ministerial meeting of the WTO, there have also been suggestions that the developing countries should take a favourable stance and agree to further negotiations or studies in new areas like investment or environmental conditionalities in return for existing or future market access. At the TWN-organized seminar here this week, several of the participants rejected such ideas.