TEXTILE BODY ROW CASTS SHADOW OVER WTO

8:42 AM Dec 8, 1994

TEXTILE BODY ROW CASTS SHADOW OVER WTO
Geneva 8 Dec (Chakravarthi Raghavan) -- Disagreement over the composition of the World Trade Organization's Textile Monitoring Body (TMB) may still hold up implementation of the multilateral agreements in the WTO even when it enters into force technically on 1 January next as now decided by the Uruguay Round Implementation Conference.

The Preparatory Committee of the WTO at its meeting Wednesday evening agreed to a few decisions, about the cohabitation of the WTO and GATT, as well as the WTO and the Tokyo Round codes on anti-dumping and subsidies and countervailing measures, to clear the way for Thursday's implementation Conference setting an entry date for the WTO.

However, the Prepcom got notice that nothing would be smooth, and the implementation of the agreements as a package could still be held up if no agreement was reached by then over the Textile Monitoring Body (TMB) which is to monitor and supervise the implementation of the Agreement on Textiles and Clothing.

At dispute is the composition of this body, with an independent chairman.

The Textiles Surveillance Body (TSB) of the Multifibre Agreement, with its limited membership, had ten members, five each from the exporting and importing members, with an independent chairman.

But the ATC encompasses all the WTO members and its TMB, to monitor and supervise the entire trade, is mandated to comprise an independent chairman and ten members, and to be "balanced and broadly representative".

Given the varying interests among the exporting countries, and some involved in a web of trading arrangements with the two majors (US and EU), the exporting countries have been insisting on six members as well as in a careful choice of constituencies for the six to ensure strong exporter-interest representation at all times in the TMB. Hence within the composition of four and six, is the question of which countries will be put into which 'constituency' and 'alternate' with whom for the election/selection of members.

A socalled 'compromise' by which the four-six ratio would be accepted, but with some of the MFA importing countries, beholden to or linked with the US and/or EU thrown into the constituencies of the six, and Canada (a Quad/NAFTA member) being either assured of a seat in the 'four' or accommodated with a Canadian as the 'independent' chair was rejected by the exporters.

With the textile and apparel industry of the US and Europe trying their best to continue their protectionist regimes of discriminatory quotas against the Third World, the role of the TMB is seen as crucial, even though it is to take decisions by consensus like other bodies.

At the Prepcom meeting Wednesday evening, which agreed to the other transition arrangements (between WTO, GATT 1947 and the Tokyo Round agreements on anti-dumping and subsidies), India voiced its concern and said that a satisfactory resolution of the TMB issue was a necessary condition for implementation of all the WTO accords.

India's Ambassador, Mr. S. Narayanan, referring to the issue, stressed that the task of the Prepcom had not been fulfilled and that this could have implications for the implementation conference.

India was supported by Hong Kong, Turkey, Pakistan, Morocco and Brunei (for the Asean group). Hong Kong stressed that nothing could be implemented until everything was implemented.

Other Prepcom sources said that while the setting of the WTO entry date by the implementation conference would not be blocked, if no satisfactory solution was reached, even after the entry into force, the composition of various WTO bodies would be held up.

The Prepcom and its Institutional, Procedural and Legal (IPL) sub-committee they said would continue consultations to resolve outstanding problems and would be meeting by 21 December to agree on any remaining problems and preparing its report to the first meeting of the WTO General Council which is expected to meet towards end of January.

On the eve of the implementation conference meeting, Prepcom Chair, Peter Sutherland who has been mediating to resolve the dispute, put forward proposals on a 'take-it-or-leave-it basis' and which protagonists were reported as giving their earnest consideration.

This compromise provided for ten members with ten constituencies (and some arrangements for alternates):

* four constituencies consisting of members and alternates to be named by the EU, US, Japan and Canada, and including in the first year Switzerland and Norway in the second and third year;

* one constituency of China and Pakistan (to alternate with each other); one constituency of Hong Kong and Korea (alternating with each other); one constituency of ASEAN members (alternating among themselves); one constituency of India and Egypt/Morocco/Tunisia (India to alternate with one of the three); Latin American and Caribbean countries (alternating among themselves); and one constituency involving Norway, Turkey and Czech Republic/Hungary/Poland/Romania/Slovak Republic and Switzerland.

Sutherland stressed his understanding that the TMB would be expected to take all its decisions by consensus, and reflecting the practice of the MFA's TSB, the TMB would take decisions by consensus except in dispute settlement cases, where consensus would not require the assent or concurrence of members appointed by the WTO Members involved in an unresolved issue.