Apr 4, 1986

U.S., EUROPEAN TRADERS FOR LIBERAL TRANSITIONARY MFA.

GENEVE, APRIL 2 (IFDA) – European and U.S. national and international trade organisations have called for a more liberal and flexible MFA-4, as a transition to application of full GATT rules and principles to trade in the textiles and clothing sector.

On the eve of the resumption of negotiations over the future of the Multifibre Arrangement (MFA), some 16 organisations representing wholesale and retail trade and similar interests, have met in Geneva over the last two days and have adopted a joint resolution which they are presenting to negotiators.

The current MFA-3 is expiring on July 31, and negotiations on its future resume Thursday in the GATT Textiles Committee.

The 16 associations, grouped in the Foreign Trade Association (FTA), said they were opposed to efforts to modify the terms of the MFA to provide greater restriction of trade, including proposals to impose limits on quota growth tighter than those presently provided in MFA-3 or to expand its coverage to fibres such as silk, linen and ramie, which are now out of the purview of the MFA.

The U.S. is the principal sponsor of both these views in the current negotiations.

The FTA also came out in opposition to quotas on a global basis, to discrimination against the major supply countries, or to inclusion of the so-called "anti-surge" mechanisms that would undermine the requirements before imposition of restrictions, spelt out in articles three and four and annexes of the MFA.

At a press conference Wednesday evening, Mrs. Edna Kavanagh, the President of the FTA, said that the lobbying efforts of the FTA over the last two or three years had already been successful in ensuring "" flexible and liberal mandate" to the EEC Commission in the forthcoming negotiations.

The mandate, while not as liberal as the FTA wanted, nevertheless would mean that there would be no freeze or negative growth for any of the third world MFA exporting countries that there would be greater access to markets in respect of children’s garments, and there would be greater flexibility and less administrative requirements in the administration of the MFA.

However, much would depend on the attitude of the U.S., since it would be difficult for the EEC alone to take a more liberal stand, if the U.S. insisted on a "more restrictive" MFA-4 than MFA-3.

Kavanagh said that according to FTA calculations, without supplies from the third world countries it would no longer be possible to provide "sufficient supply of reasonably priced textiles" in the industrial countries for large consumer segments, and especially for children’s garments.

In one form or another, the controls on trade in this sector had been going on since 1961, and it was time to end this and return to the normal GATT rules and principles.

Instead of a temporary arrangement, the MFA had been renewed every time it expired, and made increasingly protectionist.

This has resulted in progressive erosion of confidence in the GATT trading system and this must be stopped, Kavanagh said.

A representative of the Swedish trade underlined that this was the last chance, and if the MFA-4 turned out to be like MFA-3 or more restrictive "we will never be able to come out of the system".

With every extension of the MFA, more and more "new suppliers" would come in, whose exports are possible only through the MFA and not through competitiveness, and there would be an increasing vested interest in the perpetuation of the system, he stressed.

The current U.S. stance, Kavanagh said, was "most protectionist and restrictive", but the third world exporting countries were resisting U.S. pressures.

The U.S. textile negotiator, Carlisle, had been unsuccessful during his recent trip to the Far East to persuade South Korea and Hong Kong to sign bilateral accords for continuance of the restrictive arrangements, she noted.