May 9, 1988

THIRD WORLD PROPOSALS FOR ENDING MULTIFIBRE ARRANGEMENTS

GENEVA MAY 5 (IFDA/CHAKRAVARTHI RAGHAVAN)— Third World countries, members of the international textiles and clothing bureau (ITCB), presented Thursday their proposals for modalities to integrate the trade in textiles and clothing sector into the general agreement.

The proposals were put forward by Amb. Darry Salim from Indonesia, chairman of the ITCB, at the Uruguay round negotiating group on textiles and clothing.

The bureau is the alliance of the Third World countries, members of the Multifibre arrangement, which governs international trade in textiles and clothing. These special arrangements are derogation from GATT rules and principles.

The Punta del Este ministerial declaration an the Uruguay round in the area of textiles and clothing stipulates that "negotiations shall aim to formulate modalities that would permit the eventual integration of this sector into GATT on the basis of strengthened GATT rules and disciplines, thereby also contributing to the objective of further liberalisation of trade".

The Third World proposals have four 'mutually reinforcing elements', which the ITCB members said could constitute the basis for formulation of modalities for the elimination of the exceptional treatment given to the textile and clothing sector an a date to be agreed upon in the Uruguay round.

The four elements are:

--"Reversal of restrictive measures under the MFA: freeze on further restrictions, reduction of product coverage of restrictions, and relaxation and elimination of restrictions.

--"Elimination of concepts and practices under the MFA incompatible with the general agreement such as discrimination based on price and other selective criteria, real risk of market disruption, use of exceptional circumstances etc.

-- Effective application of GATT principle of differential and more favourable treatment, in terms of part IV and the enabling clause, to trade in textiles."

The Third World paper noted that the MFA was introduced at the instance of major industrialised countries to allow them "a short 'breathing space' to adjust their industry and trade regimes" to change in patterns of world trade in these products based an comparative advantage.

Based on concepts incompatible with GATT, the arrangements in this sector were developed as 'a temporary derogation' from the GATT obligations.

The basic objectives of the (successive) arrangements governing international trade in textiles and clothing were stated to be reduction of trade barriers and progressive liberalisation of trade, as well as to further economic and social development of Third World countries'.

"Instead", the ITCB members complained, "the arrangement and subsidiary bilateral agreements have become increasingly restrictive in extent and intensity, accentuating the discriminatory character of the existing trade regime in textiles".

"Instead of differential and more factorable treatment, exports of textiles and clothing of developing countries have been subject to discriminatory restrictions, which have imposed intolerable burdens on their economies".

The ITCB paper noted that numerous studies - by world bank, OECD, national administrations including latest U.S. President's economic to report to Congress - had clearly recognised the "serious misallocation of resources and enormous costs" to consumers and the economies of the industrialised countries as a result of the special protection to these industries.

The ITCB’s own studies, presented to the negotiating group, had clearly brought out the improved conditions of the state of these industries in industrial countries. The increase competitiveness and profitability of these industries no longer justified the continuation of special protection in the industrial countries.

In presenting the proposals, Salim told the negotiating group Thursday that the elements outlined should "constitute the basis far formulation of modalities for the elimination of the exceptional treatment given to the textiles and clothing sector on a date to be agreed upon in the Uruguay round".

The discriminatory trade regime in this sector, Salim underline, had subsisted for more than a quarter of a century, and the Uruguay round negotiations "must therefore ensure the elimination of the exceptional treatment given to this sector for so long".

It was now widely recognised that as a consequence of the special protection for these industries in the industrial countries, the consumers and economies of these countries have had to bear enormous casts, while heavy burdens had been imposed an the economies of the Third World.

"The decision to negotiate modalities for integration of textile sector into GATT was taken by contracting parties meeting at ministerial level in recognition of these considerations", Salim pointed out.

"These negotiations therefore offer a historic opportunity for redressing the discrimination and distortions in world trade in textiles. The negotiations in Uruguay round an textiles and clothing must therefore be pursued with full political commitment in parallel with all other issues in the Uruguay round".

The negotiating group, Salim added, had now "sufficient material" before it to enable the participants "to engage seriously" in pursuit of the realisation of the negotiating objective in this area.