Genève, 9 décembre 2004

Director-General's remarks on the occasion of the 117th and Final Meeting of the Textiles Monitoring Body

I appreciate the initiative of the Textiles Monitoring Body (TMB), whose working procedures do not normally provide for the participation of those not directly involved in the matters subject to its deliberations, of inviting me to join you on the occasion of your very last meeting. I am delighted to be with you and participate in this historical meeting.

1 January 2005, when the Agreement on Textiles and Clothing (ATC) and all restrictions there under shall stand terminated, will mark an important milestone in the development of international trade relations. The expiry of the ten-year transition period of ATC implementation will put an end to a special and discriminatory regime that has lasted for more than 40 years. With the full and timely implementation of the ATC, trade in textile and clothing products will cease to be subject to this regime and become governed by the general rules and disciplines embodied in the multilateral trading system. Hence the completion of the integration process under the ATC will not only contribute to increasing trading opportunities, but will also be of major systemic importance.

The ATC has been part of the broader package of the outcome of the Uruguay Round. It has often been said that this broader package represents a very delicate balance among its constituting elements. The ATC has been perceived by several Members, in particular by exporting developing countries and territories, as one of the most important results, if not the most important for them. This explains also the particular attention paid by most of the Members engaged in trade in textile and clothing products to the process of ATC implementation throughout the ten-year transition period. There has hardly been any Ministerial Conference of the WTO when matters relating to the implementation of the ATC have not come to the forefront. Also, on several occasions, different aspects of ATC implementation have been raised in various WTO fora, in particular, in the General Council and in the Council for Trade in Goods. Such discussions have not only confirmed the importance attached to a faithful implementation of the provisions of the ATC, but have also revealed the high political sensitivity involved in issues touching upon trade in the sector. In short, ATC implementation has been far from being non-controversial.

It is neither the appropriate time, nor my role, to provide an assessment of the quality and main features of ATC implementation (including the integration programmes, administrative arrangements and procedures, the recourse to transitional safeguard mechanism, the impact of changes in rules of origin, and compliance with the provisions of Article 7 of the Agreement, to cite only a few examples). What really matters today, is that against the background of often heated, lengthy and inconclusive debate, implementation, in overall terms, is on track. WTO Members have recently reaffirmed their commitment to the full and timely implementation of the Agreement. This proves also the ability of the WTO system to “deliver” according to the established schedule, contributing thereby to further strengthening the solidity and credibility of the multilateral trading system.

The full and timely implementation of the ATC could hardly have been achieved without a continuous process of structural adjustment implemented both in the markets of the major importing Members, and, also, by the exporting Members. Without prejudice to whether the adjustment implemented so far by individual Members has been fully sufficient or not in terms of preparation for a more competitive environment, a few related comments can be offered. First, with the conclusion of the Uruguay Round and the signature of the Marrakesh Agreement, government authorities as well as producers and traders of each and every Member have been fully aware over the past ten years of the imperative need of implementing the necessary structural adjustments. Second, structural adjustment is a steady and continuous process in any sector of the economy; it cannot and will not be stopped when confronted with a deadline, such as the date of full integration of trade in textiles and clothing into GATT 1994. The need for further adjustment will continue after the expiration of the ATC and must be made by all Members involved in the trade of textile and clothing products, be they importers or exporters or both, be they big or small. Concerns recently echoed in this regard, in particular by least-developed country Members can probably be best responded to by institutions that can make appropriate means available with a view to reducing the burden of the adjustment costs for those affected.

All in all, the elimination of the trade-distorting quantitative restrictions that are still in place will be beneficial for the global economy in terms of increased market access opportunities, efficiency gains and consumer welfare. Developing Members, as a whole, in particular stand to gain since they have significant comparative advantages in the sector.

My remarks would not be complete without saying a few words about the contribution the TMB has made to the implementation of the ATC. The Textiles Monitoring Body is a kind of semi-judicial body and while TMB members are appointed by WTO Member governments or their respective constituencies, they are required to discharge their function on an ad personam basis and not as representatives of their respective authorities. These characteristics make the TMB a unique institution within the WTO framework. Given the responsibilities exercised by the TMB and the matters referred to it, I believe it must have required determined efforts to ensure that members, though being officials and experts of their respective national administrations, performed their duties in a personal capacity.

I understand that during the early period of ATC implementation the TMB got off to a difficult start for a number of reasons. I am equally aware that through the problems encountered lessons have been learnt by the members of the Body and the TMB has become a trusted and respected WTO forum. It has been brought to my attention, for example, that also relying on the jurisprudence established by the Dispute Settlement Body through the adoption of a few related Panel and Appellate Body reports, the TMB has succeeded in developing, and in consistently applying, stringent standards in reviewing dispute cases, in particular those related to transitional safeguard measures. The detailed reports of such reviews adopted by the Body have proved to be also very helpful by providing additional guidance to WTO Members.

As reflected in the reports of the Body's meetings, the TMB has taken very seriously the mandate set out in the provisions of the ATC and reviewed all the notifications and matters referred to it. During the past few years it has succeeded, inter alia, in handling with particular care the complex issues arising from the accession to the WTO of new Members, most of them having an important stake in trade in this area. I am also pleased to note that, most recently, the comprehensive report prepared and adopted by the TMB on the implementation of the ATC during the third stage of the integration process has been very well received by WTO Members. The wealth of the information contained in the report, together with the additional comments, observations and also assessments provided therein have been recognized and appreciated by Members.

As a result of the efforts and contributions of everyone involved, the TMB has gained the reputation of a body having a very solid professional track record and taking a consistent approach with respect to the various issues referred to it. Let me pay tribute to all present and former members and alternates of the Body for the work well done. I express also my appreciation to the Secretariat staff that have been previously or, are currently directly involved in the TMB's activities for the quality of the service rendered. Also, the continuity of the Chair and the Secretary of the Body has proved to be an asset in achieving such a high standard of work in an environment of rotating and constantly changing membership.

Lastly, let me pay a special tribute to Mr. Andras Szepesi, the sole Chairman of the TMB throughout all this period. Andras' in-depth knowledge and professional qualities enabled him to perform his highly demanding tasks in a constructive and tactful manner. I am sure that you will all agree with me to say that his role has been fundamental to the proper functioning of the TMB.