Vol. 5 Num 70 Thu. August 05, 2004  

WTO envoys agree textiles ‘crisis' meet for October

World Trade Organisation envoys agreed Tuesday to talks on ways to ease what may poor countries see as a looming crisis when rich states end their textile import quotas from the start of next year.

But they rejected a call from Mauritius, backed by Bangladesh, for a special emergency session of the Geneva-based body, which the two small exporters had sought to highlight the urgency of the problems faced by poorer countries.

Instead, the talks will be held in two months' time as part of the normal work of the WTO's council for trade in goods.

"There was a convergence that we should look at the problem in October," said on envoy attending a meeting called by WTO Director General Supachai Panitchpakdi.

Smaller producers, many of which have thrived on import quotas guaranteed to them by rich country importers, fear they will be driven out of business by more competitive big producers in China and India when the quotas disappear.

From January 1, a 43-year-old accord governing trade in textiles and clothing guaranteeing poorer countries a share -- in the form of quotas -- in the markets of rich economies comes to an end and is replaced by WTO open trading rules.

The switch was agreed in 1994 to acclaim from developing countries who saw it as a way of boosting their trade with major powers where, they believed, high-cost manufacturers would not be able to compete with their cheaper products.

But with the entry of China into the WTO at the end of 2001, and a huge growth in Indian and Brazilian textile production, that outlook clouded.

In a letter to Supachai last month, Mauritius' Foreign Affairs and Trade Minister Jaya Krishna Cuttaree said it was now clear that a handful of the largest and most competitive producers were poised to seize most of the new markets.

These "unintended consequences" of the 1994 deal would cost "hundreds of thousands if not millions of jobs in those countries that can least afford it", he said, urging the WTO to explore ways of protecting them from such an outcome.