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Washington Outlook Archive
James A. Morrissey, Washington Correspondent

Associations Seek To Combat Market Disruption

By James A. Morrissey, Washington Correspondent

A coalition of textile and apparel trade associations from 54 countries has launched a renewed effort to prevent China and perhaps one or two other countries from dominating international trade in textiles in today's virtually quota-free world.

The coalition, known as the Global Alliance for Fair Textile Trade (GAFTT), comprises 94 trade groups in the US, Mexico the European Union and developed and developing nations throughout the world. It held a two-day summit meeting in Washington this week to solidify its commitments to joint actions that the associations hope will result in a new, permanent regime for textile trade and to impress on US government officials in the administration and Congress what they see as an extraordinary threat to their textile and apparel economies if nothing is done.

Delegates from 25 countries attended the meeting endorsed an ambitious eight point GAFTT plan that among other things calls for use of the safeguard mechanism in China's accession to the World Trade Organization (WTO), agreement to impose new import quotas and an urgent review by the WTO of the impact of the quota phase-out and how market distorting trade practices threaten to monopolize trade in this vital sector in the hands of one or two countries. The textile issue is on the agenda of a March 11, WTO meeting, and a number of safeguard petitions based on market disruption or a threat of market disruption area pending before the interagency Committee for the Implementation of Textile Agreements. While China has been the main focus of the coalition's actions, India has become its number two target.

With respect to China, the coalition cited what it called unfair trade practices that artificially undercut the prices of every other country in the world. They named such things as currency manipulation, export subsidies, free capital in the form of government loans and direct state subsidies. The coalition also cited a World Bank report that says China will capture half of the world's apparel trade now that quotas have been removed and a WTO prediction that China and India will take a 71% share of the global market. Allen Gant, chairman of the GAFTT, called on its members to support the U.S. textile industry's effort to get the US government to use the safeguard mechanism, and to urge their governments to do the same. With respect to India, now seen as possibly the number 2 problem, the textile industry representatives will compile data demonstrating that India is using unfair trade practices, and it will call on the WTO to take appropriate actions.

A statement issued by GAFTT said: "The crisis in textile and clothing trade is a global problem requiring a global solution. That is why GAFTT is calling for timely and effective actions by all countries, but especially the European Union, the United States and Canada."

January 2005