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Textile Industry Faces Challenges In Trade Negotiations

James A. Morrissey, Washington Correspondent

US textile manufacturers appear to have won one and lost one as trade ministers from the 149-member World Trade Organization (WTO) agreed to procedures they will follow in the Doha Round of trade liberalization negotiations, which they hope to conclude by the end of 2006. Going into talks in Hong Kong last week, US industry representatives were seeking special sectoral negotiations for textiles and apparel, and they were strongly opposed to granting zero quotas and zero tariffs to less-developed countries. The trade ministers agreed to look at sectoral negotiations, but there was strong sentiment in favor of granting special trade concessions to the less-developed countries. US textile importers, on the other hand, strongly supported the special less-developed country tariff concessions, and they are opposed to sectoral negotiations. As a result, these issues will be hotly debated during the coming months as the negotiations move forward. Ultimately, any agreement involving tariffs would have to be approved by Congress, and that's not going to be easy for anyone.

Textile lobbyists in Washington were uncharacteristically reserved in their reaction to the Hong Kong meetings. Cass Johnson, president of the National Council of Textile Organizations (NCTO), issued a statement simply noting the ministerial language including sectoral negotiations is a “positive step” toward achieving a key goal. With respect to duty-free access for goods from less developed countries , he said NCTO will be meeting with government officials to assess the impact of that commitment on textiles.

US Trade Representative Rob Portman was optimistic the Hong Kong negotiations resulted in a negotiating framework that can lead to a successful Doha Round, but he recognized that there still are major issues, particularly those regarding agriculture, that need to be resolved. In a press briefing following the negotiations, Portman recognized that there is a problem with zero textile tariffs for the less-developed countries, and while he said there is a plan to grant zero tariffs for 97 percent of less-developed country trade, he added that “there is enough space to deal with sensitive products and concerns of Congress.” He noted that countries such as Bangladesh already enjoy a “significant share” of the US textile import market, and are already competitive, so not all lines of products from all less-developed countries will necessarily be duty-free.

Julia Hughes, vice president for international trade and government relations for the United States Association of Importers of Textiles and Apparel, who attended the Hong Kong meetings, said there is a real sense among the WTO members that the world needs to do more for the poorer countries and that they will do so. At the same time, however, she said that while progress was made in Hong Kong, many divisions still exist and some tough times lie ahead. With respect to textile and apparel tariffs, she believes in the end there will be a move toward zero tariffs for the less developed countries.

The American Apparel & Footwear Association (AAFA), representing many of the US importers of textiles and apparel, said the proposed framework will benefit both the US economy and the world's poorest countries. Kevin Burke, president and CEO of AAFA, said, “The final decision envisions an ambitious outcome on industrial market access, particularly by lowering duties on apparel, footwear and textiles imposed by the United States and the other developed and developing countries.”

While Portman said he felt progress had been made with respect to particularly thorny agriculture issues, the National Cotton Council (NCC) is clearly unhappy with what is going on. Charging that “emotion overcame facts,” NCC Chairman Woods Eastland criticized the agreements on cotton trade, saying they “set unwise precedents for WTO trade negotiations.” He said US cotton producers should not be asked to accept “unfair and unequal treatment” in the negotiations. Eastland claims the United States and European Union are being asked to accept larger cuts more quickly and to give preferred access to products produced by the least developed countries “with nothing in return.” He contends the text contains no specific provisions to improve market access for US cotton, and it implies that China, the largest cotton producer and importer in the world, will receive “special dispensation” as a recent member of the WTO.

Negotiators are planning another meeting in April in an effort to close some of the gaps that still exist.

December 2005