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The Chairman of the WTO Textiles Monitoring Body (TMB), Mr. András
Szepesi, presented the main document of the major review: a 200-page report
of the Textiles Monitoring Body on the implementation of the ATC since 1
January 2002 (during the third stage of implementation). Quoting part of the
report, he pointed out the TMB's view that the “timely and full
implementation of the ATC should also be regarded as a renewed manifestation
of WTO members to their commitments undertaken in the framework of the
multilateral trading system, thereby also strengthening the credibility of
this system”. Members expressed their appreciation for the serious work
carried out by the TMB in presenting its report.
India presented the
submission
of a group of developing country textile exporters (the International
Textiles and Clothing Bureau: Argentina; Bangladesh; Brazil; China;
Colombia; Costa Rica; Egypt; Guatemala; Hong Kong, China; India; Indonesia;
Republic of Korea; Macao, China; Maldives; Pakistan; Paraguay; Peru; Sri
Lanka; Thailand; Uruguay; and Vietnam). It said that the ATC had been hailed
as a major achievement of the Uruguay Round, and was estimated to contribute
as much as one-third of the entire gains from negotiations. India pointed to
the welfare gains that would follow ATC, which it stressed was part of the
Round's “single undertaking”. The submission,
according to India, contained specific proposals regarding possible
conclusions of the review, including the following: that the Goods Council
should take note of the TMB report; express regret over certain measures by
the European Communities, Turkey and the United States; express
disappointment over the denial of carry forward quotas in 2004; recall the
Doha Ministerial Decision that Members should exercise care before
initiating anti-dumping investigations on textile and clothing products
previously under quota; and exercise close oversight of process until full
and faithful implementation of the ATC. These countries also strongly
welcomed the statement by Norway expressing the hope that the abolition of
quotas would not be replaced by other forms of restrictions.
Turkey and Tunisia intervened to signal their interest for the agenda item
that would follow on adjustment-related issues. Their initial response was
to underline the socio-economic importance of the sector for income
generation, employment and poverty reduction. They noted that there were
“different perceptions of experience among WTO Members in the last stage of
integration”. They expressed concern over the "sustainability of economic
and social development after ATC expiry", adding while generating
opportunities and challenges, the quota phasout would result with a few
enjoying the opportunities, and most coping with the challenges. Tunisia and
the European Communities mentioned Article 7 (on improved market access for
textiles and clothing) of the ATC and the need for an equitable trading
environment in the textiles and clothing sector.
The United States said that the past year has been trying times for the US
textile industry, but that it would fully abide by its commitments. The EC
expressed satisfaction with the contents of the TMB report, adding that
different perceptions were inevitable. In the
light of statements made, the Chairman (Amb. Alfredo Chiaradia of Argentina)
proposed and the Council agreed to hold dedicated sessions for the review.
The Chairman announced an indicative list of issues for these sessions:
It was understood that this list would not
preclude Members from adding other issues. The EC indicated that it would
add an issue drawn from ATC Article 7 on improvements in market access for
fair and equitable trading conditions. The first dedicated meeting is
scheduled for 18 October 2004. Under another
agenda item, on “post-ATC adjustment-related issues”, Mauritius presented a
proposal
on behalf of co-sponsors Bangladesh, Dominican Republic, Fiji, Madagascar,
Sri Lanka and Uganda for the WTO Secretariat to carry out a study aiming at
identifying the adjustment-related issues and costs that may arise with the
phase-out of the ATC, including recommendations on measures to address such
issues; and for the Goods Council to establish a Work Programme with a view
to finding solutions to the problems identified in the paper. Jamaica and
Nepal joined as co-sponsors at the meeting.
Mauritius and the other co-sponsors stressed that the textiles and clothing
sector was critical for them as a source of employment, particularly for
women, income generation and poverty reduction. They expressed concern that
the ATC expiry would result in industry losses and revenue shortfalls,
create zero sum outcomes with few winners and many losers, and have an
impact on global sectoral trade flows. Some
delegations, like the Dominican Republic, said that the back-loading of
implementation has led to the impending problem of sharp adjustment shocks.
Mauritius and other co-sponsors stressed the need for solutions to the
adjustment costs and other challenges that would follow ATC expiry, and
urged that this be made part of future Council agenda. They were supported
by a number of countries, including Tunisia, Haiti, Lesotho, Jordan,
Romania, Turkey, El Salvador, Nicaragua, Israel, Mexico, Kenya, Nigeria,
Chinese Taipei, Morocco, Panama, Namibia, Rwanda.
Many delegations expressed understanding for the concerns expressed by the
co-sponsors and a pre-disposition to having these issues addressed but there
was a wide range of reactions and suggestions on how these should be tackled
in the WTO. A number of delegations, including
China, Chinese Taipei, India, Thailand, Brazil and Cuba, said that
adjustment costs and challenges were inseparable from trade reform,
including in commitments undertaken in WTO Agreements. They said they
themselves have undertaken adjustment, and stressed that in addressing
adjustment costs and challenges, the foundations of the rules-based system
must not be undermined. Several delegations,
like China, Brazil and Chinese Taipei, felt that the issues raised could
only be meaningfully addressed on a systemic and cross-cutting basis.
China and India also urged a more active role by the IMF and the World Bank.
Brazil suggested an exchange of national experiences in responding to
adjustment challenges. It said that while the textiles and clothing sector
is important, its adjustment considerations were not different from those in
other sectors. Thailand stressed that whatever solution was considered
should be one that would enable comparative advantage to work.
Several delegations, including India and Cuba, said that Members should
examine closely the possible implications of the proposal.
The World Bank and the IMF identified opportunities and mechanisms existing
in their institutions for dealing with adjustment considerations. The IMF
drew attention to its outreach activities with the WTO to address adjustment
issues in the textiles and clothing sector.
The Chairman noted the important issues raised in the discussions. He
proposed, and the Council agreed, to hold open-ended informal consultations
in an expeditious manner on this item.
The Goods Council also:
Agreed to extend the deadline for withdrawal of concessions under Article
XXVIII:3 for six months as set out in an
EC communication and to refer the matter to the General Council for
adoption. This item — “EC Enlargement: Procedures under Article XXVIII:3 of
GATT 1994” — was added to the agenda at the request of Argentina, Australia,
Brazil, India, Malaysia and Thailand. -
Forwarded for examination to the Committee on Regional Trade Agreements the
following: Armenia's free trade agreements with Ukraine, Kazakhstan,
Moldova, the Russian Federation and Turkmenistan; and the Protocol on Trade
in the Southern African Development Community (SADC).
-
Approved and forwarded to the General Council waiver requests in connection
with the introduction of Harmonized System 2002 changes by Argentina and
Israel.
-
Agreed that the Chairman will conduct informal consultations on a joint
proposal by Brazil and India for a study on the trade and investment effects
of TRIMs and of their elimination.
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