US And European Manufacturers Set Joint Agenda

Trade associations representing US
and European textile manufacturers have joined together to present a united front with respect to
textile and apparel trade, if and when, the stalled Doha Round of trade liberalization negotiations
is resumed.

At the annual meeting of Eurocoton, the European trade organization representing the cotton
and allied textile industries, officials of that group and the Washington-based National Council of
Textile Organizations (NCTO) urged their respective governments to attack countries that use
non-tariff barriers to protect their own industries while employing what they say are “predatory
trade practices” that undermine textile and apparel manufacturing in the United States and Europe.

“The Doha negotiations are supposed to increase trade, not hand it over to countries [that]
do not play by the rules,” said Cass Johnson, president, NCTO. “Our industries are strongly opposed
to Doha ‘solutions’ currently under consideration that would allow the central government of China
to dominate world productions of textiles and apparel under the guise of increased market access.”

Thomas Lanaras, president of Eurocoton, said the trade promotion formulas currently under
consideration in the Doha Round do not take into account protectionist policies of China and other
major exporting countries. “We cannot support formulas [that] allow protectionist and high tariff
walls while trading away the last defenses our industries enjoy,” Lanaras said. “Our governments
should support a sectoral solution which, on the tariffs side, would be equitable by providing for
tariff reciprocity at levels that would still preserve attractiveness to existing preferential
tariff rates, rather than slash them.”

The Doha Round of negotiations was suspended last April when it became apparent there were
vast differences on agriculture issues and the positions of the developed and developing nations in
the manufacturing sectors. While US government trade officials remain optimistic about the chances
for resumption of the talks, little progress has been made. Another key issue standing in the way
of the negotiations is the question of renewal by Congress of the President’s trade promotion
authority (TPA), which expires at the end of June. Without TPA, officials in the United States and
other countries agree, a successful round of negotiations would be impossible

While there is anything but a consensus on textile tariff cuts, US and European officials
say that whatever is done must result in reciprocal market access.

With respect to another major issue — removal of safeguard quotas on Chinese imports at the
end of 2008 — the European and US trade associations voiced their concern over the impact of
freeing up trade in what are considered particularly sensitive product categories. According to
officials of the two trade associations China has captured a two-thirds share of both the European
Union and US markets where quotas have been removed in the past. They warned that their industries
would be “devastated” if quotas are removed from the product categories that still remain under
quota control.

Both groups urged their governments to ensure that Chinese exports in key categories
continue to be kept under quota restraints after the present safeguards expire.

June 12, 2007