Associations Seek Review Of Textile Trade Policies

Textile and apparel trade associations representing manufacturers in 47 countries have agreed to
seek their governments help in getting the World Trade Organization (WTO) to conduct a review of
trade policies that would include a continuation of extension of textile and apparel quotas until
2008. They also are calling for implementation of automatic safeguard mechanisms that permit
imposition of quotas on products that are disrupting markets and expedited and effective remedies
to address unfair trade practices.

At a summit meeting of 25 of the organizations who are members of the Global Alliance for
Fair Textile Trade, Allen Gant, chairman of the National Council of Textile Organizations, said
“Clearly it is time for governments to act.”

Summit attendees and other members of the alliance are urging governments whose textile and
clothing manufacturing industries are at risk to petition the WTO for an emergency meeting to
discuss the textile and clothing trade crisis.

The organizations and their governments have three possible approaches to getting the WTO to
act. They can ask the Council For Trade In Goods, which has jurisdiction over textile issues, to
call a meeting. They can seek a meeting at the ministerial level or the WTO Director General can
call a meeting. In addition, alliance members will urge their respective governments to use their
own trade laws to remedy trade problems.

While the US government is opposed to extending textile and apparel quotas, trade
associations in this country are mounting a major political effort to change that stance. In
addition, they are putting increasing emphasis on the use of the safeguard mechanism in the
US-China bilateral trade agreement. Last year, the US government used the safeguard mechanism to
impose quotas on three categories of imports, but industry lobbyists are seeking a more
comprehensive approach. They say the government has the power to impose quotas if there is a threat
of market disruption, and it does not have to wait until actual market disruption is demonstrated.
US importers of textiles and apparel are opposed to that, and in fact, they contend that market
disruption was not demonstrated in the case of the three categories last year.US textile
manufacturers have turned to Congress for help. They have secured letters to the White House from
99 House members and 29 senators urging President Bush to endorse an emergency meeting of the WTO
to reconsider the wisdom of allowing world-wide quotas on textiles and apparel to expire next
January 1.

June 2004