TEXTILE COMMITTEE MEETS ON MFA-4 ROLL-OVER SET FOR 16 MAY.

Mar 28, 1991

TEXTILE COMMITTEE MEETS ON MFA-4 ROLL-OVER SET FOR 16 MAY.

GENEVA, MARCH 26 (CHAKRAVARTHI RAGHAVAN) – The meeting of the GATT Textiles Committee to consider the future of the MFA-4 - whether it should be rolled over beyond its current expiry date of 31 July and if so for how long - is now being set tentatively for 16 May.

The integration of Textiles and Clothing trade into GATT is one of the items on the agenda of the Uruguay Round, and a decision on a rollover or prolonging the MFA-4, and if so under what conditions or limitations, is now one of the consequential decisions to be taken following the prolongation of the Uruguay Round without setting any new deadline.

The GATT Director-General Arthur Dunkel who chairs the Textiles Committee reportedly held "green room" consultations on this Monday when the members of the International Textiles and Clothing Bureau, the 32-member alliance of the Third World countries Exporters of Textiles and Clothing made clear they would be unable to discuss the future of the MFA-4 until after the meeting of the ITCB Council scheduled to be held in Indonesia 6-11 May.

The U.S., Canada and the EEC which had been hoping for a quick decision on rollover expressed their regret but had to go along.

The U.S. and Canada want a 29-month rollover while the EC favours a 17-month rollover.

The difference appears to be related to their expectations about the time-horizon for the conclusion of the Round (the EC wants it to be completed before end of 1990) and the subsequent time that might be needed for participants to ratify the Uruguay Round agreements.

Within the ITCB, India, Pakistan and a few others appear to favour no more than a 5-month rollover, till end of the year.

In the draft agreement referred to the Brussels Ministerial meeting, it had been contemplated that the Uruguay Round Agreement on integrating Textiles and Clothing trade into GATT (with its transitionary safeguard provisions and time-period for MFA phase-out and phasing in of trade into GATT) would begin from 1 January 1992.

On that basis within the ITCB there had been a general under-standing that the MFA-4 could be rolled over for five months till end 1191.

Hence of clearer indications about the time-horizons for completion of the Uruguay Round, and also perhaps assurances that the rollover would be used to liberalise and not further tighten the discriminatory bilateral quotas, countries like India, Pakistan and a few others appear to be unwilling to go beyond this.

In the consultations Monday, Hong Kong reportedly said that while, as an ITCB member, it had gone along with the decision not to discuss or negotiate the rollover until after the 6-11 May meeting of the ITCB, it would not be agreeable to only a 5-month rollover but would want a longer period so that its trade would not face uncertainties.

Within the ITCB Hong Kong is known to have tried to canvass other members to agree to a decision now for a rollover. While it had itself suggested a 19-month rollover, it was also known to have been favourably inclined towards the U.S. desire for a 29-month extension of the MFA-4, but preferring the U.S. to ask for it.

Hong Kong's argument had been about the need to isolate the U.S. Textile lobby and help the U.S. administration get fast-track authority extension from the Congress.

Mexico also is known to have favoured such an action. Mexico is very much set on the North American Free Trade Agreement move.

This too needs fast-track authority from Congress. The provision for extension of fast-track authority in the U.S. omnibus Trade and Competitiveness Act is the same as for Uruguay Round. Failure of one to clear the Congressional hurdle would doom the other. U.S. domestic lobbies opposed to one or the other have joined forces.

Other participants, while willing to be careful and not throw a spanner into the works, have not been willing to pay a price for U.S. fast-track authority extension.

The extension of fast-track authority is automatic unless either House of the Congress disapproves by a simple resolution before 31 May:-In practical terms, this means that pending resolutions on this subject should be reported out of the relevant committees, the Finance Committee in the Senate and the Ways and Means Committee in the House of Representatives, by 15 May.

In other developments, the Chairman of the Contracting Parties, Amb. Rubens Ricupero of Brazil is to hold consultations on the post-Brussels phase of the Uruguay Round "processes".

This was reported to have been agreed to Tuesday in "green room" consultations chaired by Arthur Dunkel.

The consultations by Ricupero would be on the number of groups in which further work of negotiations in the post-Brussels phase of the Uruguay Round is to be carried on and on who is to lead each of these individual groups, participants said.

Till the Brussels meeting, the negotiations in the area of goods were carried out in 14 separate negotiating groups, under the overall control of the Group of Negotiations on Goods, and that on trade in services in the separate Group of Negotiation on Services.

At Brussels the Ministerial-level consultations were organised in seven clusters and the same clusters - Agriculture, Textiles and Clothing, Services, Rule-making, TRIMs and TRIPs, Dispute Settlement and Final Act and Market Access - have been used in the post-Brussels phase of the work programme so far.

While there is general agreement among participants that in the work ahead it might not be necessary to maintain the 14 separate negotiating groups (in goods) and some of the subjects could be grouped together, there are some differences on the number of such negotiating groups or clusters, what should be the basis and subjects of each of the groupings, etc.

It was made clear at the February TNC meeting, which agreed to the re-start of negotiations on the basis of an agenda and work programme put forward by Arthur Dunkel, that the separate structures for the goods and services negotiations, as well as the separate surveillance body for monitoring the standstill and rollback commitments, provided for in the Punta del Este Declaration, could not be changed.

At Tuesday's consultations, some participants are reported to have questioned the logic (followed at Brussels and since then) of keeping the TRIPs and TRIMs negotiations in one group.

Ricupero will also consult with the CPs on the chairmanship of the various groups.

The U.S. and the EC want to make a "break" with the past, even fighting shy of use of the term "negotiating group" or "group".

This is both aimed at getting out of any of the negotiating history hitherto as also to find a way of "dumping" chairman of the consultations with whom they are not happy.

Whatever the number of the "clusters" or "negotiating groups" and whoever is to lead them, there is agreement that these groups and their meetings must be open to all participants, and the present non-transparent and informal arrangements should end.