Mar 7, 1991

SOME TECHNICAL WORK ON TEXTILES & CLOTHING IN APRIL.

GENEVA, MARCH 6 (BY CHAKRAVARTHI RAGHAVAN) -- Technical and other work on Textiles and Clothing in the re-started Uruguay Round Negotiations will be on the basis of the draft text along with the basic points of difference in the commentary referred to the Brussels ministerial meeting, according to Third World participants.

The technical work in the next "consultations" will be in the week of April 8.

This would appear to be the outcome of the consultations on Textiles and Clothing held Tuesday and chaired by GATT Director-General Arthur Dunkel.

The compendium of various texts and commentaries referred to Brussels are commonly referred to by their document number W/35

The future of the current Multifibre Arrangement (MFA-4), which expires on July 31, did not figure in the discussions.

GATT Director-General, Arthur Dunkel, who chairs the Textiles Committee (the official forum for any discussions and negotiations on MFA), is holding "green room" consultations on March 27.

The U.S. wants a roll-over of the MFA-4 well into 1993.

Some of the exporting countries, both a few dominant exporters and some smaller suppliers who wish to preserve their current market share would probably favour this.

But others are unwilling to take any step or consider their options until the U.S. fast-track authority situation is clear.

The basis for further work in Textiles and Clothing in the Uruguay Round agreed upon Tuesday would appear to mean that in effect the outcome of discussions in small informal consultations at Brussels would not figure, though some participant or other might try to use it.

In his statement and work programme at the TNC on 26 February for the re-start of the negotiations, Dunkel had said that while much intensive work had been done in Brussels, the issues to be resolved in Textiles and Clothing remained essentially the same as were referred to Brussels.

Further work, he had said, should proceed within the framework established for the negotiations up to the end of the Brussels meeting and that the work carried out at Brussels should be taken into account as appropriate.

At Brussels, in the small consultations of some key countries, there had been some discussions on four or five articles of the proposed draft agreement for integrating the textiles and clothing trade into the GATT, but unlike in other areas the chairman of the consultations has not presented any informal paper on the outcome.

The discussions at Brussels included those on the phasing out of MFA restrictions and phasing-in that trade into the GATT as well as issues relating to so-called "circumvention". At Tuesday's meeting, Amb. Hasan Kartadjoemena of Indonesia speaking on behalf of the Third World exporting country-members of the International Textiles and Clothing Bureau, underlined their view that all the outstanding issues mentioned in the draft text before the Brussels meeting were of equal importance in achieving a satisfactory result. The ITCB members, he said, had great difficulty with the product coverage in Annex II the draft text which was meant to establish the rates of integration over time. But the annex contained a number of items, which had never been restrained under the MFA by any country, and (including them in the annex) had serious implications for the integration process.

The integration ratios mentioned in the draft text were also too low. The ITCB attached importance to the integration mechanism encompassing a quantified range of products from the groups in Annex IV of the draft text.

Annex IV sets out four stage elimination of restrained products, according to their degree of processing (tops and yarns, fabrics, made-ups, and clothing).

"With the wide product coverage of Annex II as it stands now and the low integration ratios, we are doubtful if in practice any MFA restriction will be removed till the very end of the integration period. This would be contrary to the mid-term review commitments of progressiveness in the process of integration". The questions of product coverage, integration ratios and percentage of products to be drawn from each group "are closely interlinked and need to be resolved in accordance with the objectives agreed to at the mid-term review". The growth factor was "a critical instrument for achieving liberalisation" and existing quotas should be "progressively enlarged in such a manner that they lose their restrictive effect and facilitate the integration of the restricted products into GATT". "The growth factors mentioned in the draft are so low, that they can not serve this purpose and need to be substantially improved", Kartadjoemena added. From the beginning the special safeguard system of the MFA, which had been in existence for a long time, had been used "with increasing frequency to cover an enlarging range of products and developing country sources" and this trend had to be reversed during the transition period.

The transitional safeguard mechanism, in the ITCB view, should have stricter criteria and procedures and increased multilateral surveillance in its operation.

It was also essential to have a meaningful differential and more favourable treatment for small suppliers and cotton producing countries in order to fulfil the mandate. The technical work should focus on a "thorough examination" of Annex II of the draft agreement. Towards this end, the ITCB would invite all MFA restraining countries to table import data in volume terms for each Harmonised System (of customs classification) number in the annex, indicating the particular HS lines which were under MFA quota. The MFA restraining countries should also provide information on the import of products under restraint as a percentage of the total volume of imports covered by the annex, the ITCB spokesman added.

Supperamaniam Manickam of Malaysia, speaking for the Asian group of countries, said it was difficult to differentiate between the technical and political aspects. However work could be done on the annexes and the practical implications of the schemes envisaged in the Chairman's draft text.

John Beck for the European communities said the chairman's text had a very degree of consensus and could be the basis for work. The EC, he added, was looking for an "acceptable economic package" whose essential elements would include the time span for integration, an acceptable growth factor and integration ratio. For the EC the strengthening of the GATT rules and disciplines was also important. The EC would find it difficult to find the information asked for by the ITCB.

The Nordics said that the W/35 could be the basis for further work but thought at some stage they could take account of the work done at Brussels. In terms of technical work, the Nordics saw the need for evolving uniform computation in terms of units of measurement of textile categories, which would be needed for determining the integration ratio. In some cases these were stated in pounds, in others in kilograms, and in other cases in terms of sq. metres.

Bob Shepherd for the U.S. said they could not agree with the ITCB view about the practicability of the numbers (used in the draft texts) nor of the analysis of them by the ITCB. But the U.S. could provide the figures of volumes for 1990 according to the HS schedule and the volume of the restrained products in each category according to the HS lines. In summing up, Dunkel reportedly suggested that the next consultations could take place in the week of 8 April and that all participants would try to provide the data sought and the GATT secretariat would also try to update the statistical information. The U.S. reserved its right to seek information (on the same lines sought from the importing countries with MFA restraints) from others about their import and export data.