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EC’S 3RD STAGE INTEGRATION OF ATC PRODUCTS INTO GATT

The EC has recently announced its proposals for a further stage of integration of its textile and clothing product imports into the regular GATT disciplines. Some trade observers have however said that in fact very little meaningful liberalization of the trade was planned or proposed.

by Chakravarthi Raghavan


Geneva, 13 July 2000 -- The European Commission announced in Brussels Wednesday, with some fan-fare, its proposals for a further stage of integration of textiles and clothing product imports into regular GATT 1994 disciplines.

Under the WTO Agreement on Textiles and Clothing, the importing countries who had maintained Multifibre Agreement (MFA) restrictions before the WTO, have to integrate into normal GATT rules a further 18% of their trade in ATC products at the third stage of integration, beginning 1 Jan 2002.  The EU Commission announcement said that the Commission has proposed the elimination of all remaining restrictions on imports of 62 categories of textiles and clothing products, or 18% of its imports, from other WTO countries. The proposals, if and when approved by the EC Council of Ministers, and notified to the WTO, are to take effect from 1 January 2002, the third stage of integration.

The EC has said the proposal would eliminate 37 bilateral quotas.

The remaining quotas, all on so-called sensitive and very sensitive products are to be eliminated on 1 January 2005, when the ATC itself with its authorized discrimination will disappear.

The Commission has called it “a powerful signal” of the EC’s commitment to multilateral obligations and to progressive and fair dismantling of textiles import restrictions.

The EC presents itself often as more friendly and open to developing countries than the United States.

Category 68, in the list of proposed integration products, published by the EC on its webpages about trade in the textile sector is described as “babies’ garments and clothing accessories, excluding babies’ gloves, mittens and mitts of categories 10 and 87, and babies’ stockings, socks and sockettes, other than knitted or crocheted, of category 88.”

A closer look shows that these cover garments of infants no more than 86 cms in body-height.

Incidentally, it is a product that the US integration, which everyone agrees has been least integrative and most protective, put into its second stage of integration!

There are one-two categories where currently restrictions are maintained against a few countries, and are now planned to be integrated:

*        category 10 (gloves, mittens and mitts, knitted or crocheted); category 18 (men’s or boy’s singlets and other vests, underpants, briefs, nightshirts, pyjamas, bath robes etc, other than knitted or crocheted; women’s or girl’s singlets and other vests, petticoat, panties, briefs etc other than crocheted or knitted); category 21 (parkas, anoraks, windcheaters etc, other than knitted or crocheted, of wool, cotton or man-made fibres); category 24 men’s or boys’ and women’s and girls’ nightshirts, pyjamas etc; and women’s or girls’ skirts, including divided skirts.

*        there are several categories of ATC products made of hemp, sisal and other fibres that are not commonly understood as textiles and clothing products, but put into the annex under the Dunkel text.

Third World textile and clothing exporting countries, and their secretariat (in the International Textiles and Clothing Bureau) would not comment pending a detailed analysis of the proposals.

However, other trade observers and experts said that in fact very little meaningful liberalization of the trade was planned or proposed.

Several of the categories listed are those in which there are some restrictions against one or two countries (like South Korea). The products are either those not traditionally understood as textiles and clothing, but brought into that category by the ‘feat’ of the 1991 Dunkel text - of including all kinds of fibres and products, both those under restraint and those not even under restraint.  This was done in the Dunkel text (of 1991) and remained without change and went into the Marrakesh Agreement, along with the TRIPS text (with a slight change about dispute settlement and the non-violation moratorium). And that Dunkel text was one that was hammered out in private conclaves among a few, and points of differences removed by the Dunkel arbitration-compromise proposals.

There have been several writings, including some statements in the WTO panel/Appellate Body rulings, about the overall balance of rights and obligations struck in the Uruguay Round - with developing countries taking on more obligations as in TRIPS and TRIMS or more market access to the North as in the GATS, in return for liberalisation of trade and market access in agriculture and textiles and clothing.

The EC announcement in Brussels makes clear that beyond these token integrations, it would remove restrictions to achieve any meaningful and significant trade liberalization only in return for new commitments by developing countries in reciprocally reducing their tariff barriers to EC exports of textiles and clothing.

“In view of the significant restrictions that EU exporters face in many non-EU countries, the Commission has at this stage considered appropriate to retain a number of quotas in most sensitive products where further liberalisation could be envisaged in exchange for better access to non-EU countries' textiles and clothing markets.”

In other words, while the EC (and the US and others) gave no compensation to the developing world for the 40-years of MFA textiles regime, as a departure from GATT disciplines, and agreed to integrate the trade into the WTO in return for the price paid by the developing world (through TRIPS, TRIMS and GATS), the meaningful trade liberalisation of the ATC would need a further price from the developing world.

A leading Third World trade expert and observer, Mr.Bhagirath Lal Das, recently called the ATC and the way it is implemented by the industrial world, as one of two frauds perpetrated on developing countries in the Uruguay Round. The agriculture agreement, and its tariffication and permitted subsidies was the other fraud.

Welcome to the rules-based multilateral trading system.-SUNS4708

The above article first appeared in the South-North Development Monitor (SUNS) of which Chakravarthi Raghavan is the Chief Editor.

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