Nov 8, 1988
THIRD WORLD DISAPPOINTED ON TEXTILE NEGOTIATIONS.
GENEVA, NOVEMBER 4 (IFDA/CHAKRAVARTHI RAGHAVAN)—Third world countries members of the Multifibre Arrangement (MFA), have expressed their dissatisfaction with lack of progress in two years of negotiations on textiles and clothing in the Uruguay round, and the inability of the group to formulate specific recommendations to Ministers for their Montreal mid-term review meeting. According to third world participants, the chairman of the group, Lindsay Duthie of Australia, is likely to produce a report which will merely called upon Ministers to affirm their political will to implement the Punta del Este mandate in this area. They will be asked to show this by commencing new and substantial negotiations early in 1989 on modalities that would permit "the eventual integration of this sector into GATT on the basis of strengthened GATT rules and disciplines, thereby also contributing to the objectives of further liberalisation of trade" - the exact wording of the mandate. Participants said the report is also expected to ask the Ministers to recognise that the textiles negotiation is one of the key elements an the Uruguay round agenda in view of the great importance of this sector for the economies of many third world countries including in employment and for their exports and export earnings. Third world participants said that the only positive element would perhaps be a recommendation calling for recognition of the need to provide special treatment to least developed countries, as provided in the 1979 GATT enabling clause and in the Punta del Este declaration. The idea would appear to be to remove restrictions on imports of textiles and clothing from the LDCS. Third world participants said that efforts by the third world MFA countries, grouped in the International Textiles and Clothing Bureau (ITCB), to move the negotiations in this key sector forward failed in the face of the positions of the U.S., EEC and Japan. The U.S. has no negotiating mandate, and in the discussions this week, the U.S. delegate frankly even refused to set a "time-frame" for the "eventual integration" of this trade into GATT, as called for by the Punta del Este mandate. Japan, with very large structural trade surpluses, and an early victim of such arrangements - the U.S. made textile export restrictions by Japan a condition for its entry into GATT - is now seeking to use the MFA against third world exporters. The EEC, while claiming that it is in support of the mandate, has been trying to tie progress in negotiations in this sector to negotiations in other areas, including on "safeguards", tariff and non-tariff negotiations, and intellectual property rights. In safeguards, the EEC wants the right to impose "selective safeguards", or safeguards against imports from some but not all sources of imports. This would virtually amount to putting into GATT and its safeguards provisions the provisions of the MFA, and then claim that the mandate would be fulfilled by such on integration. In the IPRS, the EEC wants new and substantive norms introduced through GATT across a wide front, including in areas that are not now recognised as feasible of intellectual property protection. The EEC claimed support for its view from the mandate and its references to strengthened GATT rules and disciplines. This EEC view reportedly was rejected by a number of third world participants who noted that the negotiators in this area had been asked to formulate modalities to permit eventual integration, and it was this "eventual integration", and not "formulation of modalities" that was contingent upon strengthened GATT rules and disciplines. At this week's meeting, the Indonesian delegate, Amb. Darry Salim, chairman of the ITCB presented a statement, drawing attention to several studies and proposals of the ITCB members. If all participants had approached the negotiations in the same manner as the ITCB members, it would have been "at an advanced stage", he noted. Salim also regretted that the ITCB proposals for a freeze on further MFA restrictions had not been seriously addressed. If the objective of the eventual integration into GATT was to be realised, it was necessary to put a stop to the introduction of "new selective and discriminatory restraints" under the MFA, which introduced further distortions to international trade, he reportedly contended. In this regard, the ITCB chairman reportedly welcomed the Swedish government's initiative and proposal to its parliament for "complete deregulation" of restrictions on textiles and clothing from "so-called low-priced countries", and terminate bilateral agreements for export restraints (currently in force) by july 31, 1991 when the MFA-IV is due to expire. Salim hoped that other industrialised countries would follow the Swedish initiative. He also noted that similar steps were being contemplated by other Nordic countries, but regretted another EFTA member Austria, has now embarked on a policy of more restrictions an textiles and clothing. Third world participants said that the Swedish initiative has been the result of an assessment that the MFA restrictions had penalised the consumer by keeping out cheaper imports, but had not benefited the Swedish industry. Due to its duty free arrangements for imports from EFTA and EEC countries, the space in the market vacated by third world exports (put under restraint) has been taken up by imports from EEC and other EFTA countries, as well as the U.S. and other industrial countries. The ITCB statement, supported by all the 14 members countries, said that the recommendations to the ministers at Montreal, should include a number of "essential elements". These elements were identified by Salim as: --Crucial importance of achieving results in negotiations, --Commitment by participants to engage in substantive negotiations early in 1989, --Agreement to be reached within the Uruguay round on modalities for integration of the trade in this sector into GATT, --Agreement that the phase-out of MFA restrictions will begin upon expiry of the present MFA protocol (July 31, 1991), --Agreement that process of integration would be gradual and progressive, and --Agreement that process of integration would be completed within a specific time-frame to be agreed upon during the Uruguay round.