Dec 13, 1986

MFA EXPORTERS VOICE CONCERN OVER U.S., CANADIAN ACTIONS.

GENEVA DECEMBER, 10 (IFDA/CHAKRAVARTI RAGHAVAN)-- Third world exporters of textiles at clothing have called for strict adherence to the protocol of extension of the Multifibre Arrangement (MFA), and the letter and spirit of the Punta del Este declaration in regard to its standstill on protection and negotiating modalities of returning this trade to normal GATT rules.

The protocol for MFA-4, concluded on July 31, 1986, has now been signed by 23 countries, the latest being India which has signed the protocol under protest (something less a formal reservation) over the extension of the MFA to new fibres.

The viewpoint of the third world exporting countries was reportedly presented at this week' s meeting of GATT textile committee.

Since the MFA-4 has been just concluded, the review of its working could not be undertaken at the meeting. But the third world exporting group of and individual members provided their assessment of the MFA-4, as well as on-going efforts at negotiating bilateral accords within the terms of the MFA-4.

Both the spokesman of the third world group, as well as a number of individual exporting countries, are also reported to have called for more careful scrutiny of bilateral accords by the Textile Surveillance Body (TSB). With bilateral accords even being sent back for changes in cases where they violated the provisions of the MFA-4.

Darry Salim of Indonesia, spokesman of the group, reportedly underscored the group’s concern about the "overall negative direction" of the agreement, even during a period as in 1986 when the domestic textile and clothing industries importing countries had recovered substantially.

The third world countries, Salim said, had accepted MFA and its provisions for extended fibre coverage on the clear understanding that its provisions for consultations and restraints could be invoked only with respect to directly competitive imports of such textiles.

The improved disciplines in the MFA-4, as well as more favourable treatment promised for least developed countries and wool-based exporters, should be fully reflected in bilateral accords.

Salim, and a number of individual delegates, voiced their concern over the Canadian pressures in bilateral accords to virtually freeze or cut down import levels, in violation of the MFA-4 provisions and of unilateral actions by the U.S., aimed at pressuring the exporting countries to agree to restrictive access levels.

Such an approach, Salim told the textiles committee, could not but further erode the confidence of third world countries in the commitments undertaken by industrial countries at multilateral levels, including most recently at Punta del Este while launching the Uruguay round.

In so far as the MFA trade is concerned, the standstill at Punta del Este requires GATT Contracting Parties not to take any restraint or trade distortive actions which are illegal under the MFA or any legally permissible measures beyond those strictly required in the specific instance.

Third world delegations privately explain that the U.S. has been issuing "indiscriminately" calls for consultations aimed at reducing export levels, and doing this in a mechanical fashion irrespective of the merits of each case. Even if ultimately the calls prove to be groundless, the trade harassment caused would do damage to their exports, these countries complain.

In the case of Canada, these sources said. Even small suppliers and new entrants to the trade - who have been assured a measure of non-restraint - are being pressured to freeze or cut back their export levels.

Salim also underscored the Punta del Este decision to negotiate in the new round the formulation of modalities for the eventual integration of trade in textiles and clothing into GATT on the basis of strengthened GATT rules and disciplines.

Third world countries, Salim said, "expect that there shall be a clear demonstration of political will to carry out these negotiations by the establishment of a negotiating group for trade in textiles and clothing".

Third world sources said that in the on-going consultations in the group of negotiations on goods (GNG), for the formulation of the negotiating plans and structures for the Uruguay round, the

U.S. has been trying to block the setting up of a separate negotiating group on textiles and clothing, as also to postpone the actual negotiations in the area till 1989 so that it could be merged into efforts for a new MFA-5.

Third world sources said that the U.S. itself gave a "low-key" response, but repudiated the interpretation of Bangladesh that jute goods were not subject to restraint or that imports from least developed countries would remain unrestrained.

The spokesman of the European communities was reported as saying that the EEC was watching the protectionist pressures in other importing countries with some concern, since any such actions would have an impact on EEC markets through trade diversion and other factors.