Quotas on textiles and clothing will definitely be eliminated by 2005.” This unambiguous declaration was made here on Tuesday by the chief trade negotiator for the 15-nation European Union (EU), Pascal Lamy. He pointed out that December 31, 2004 was the “firm, definitive expiry date” of the 1994 Agreement on Textiles and Clothing (ATC). “I’m sure on this point, after two days of discussions,” the EU’s trade commissioner went on. He was addressing the final session of the conference on the future of textiles and clothing after 2005, which he had convened. His audience of some 600 included trade ministers, representatives of European, Asian and American textile organisations, trade unions and non-governmental organisations. It had spent the past two days “brainstorming,” as Lamy put it, on the consequences for world trade of the elimination, after some 40 years, of quotas on developing countries exports of textiles and clothing. The Indian delegation, among the largest to the conference, was led by the secretary, ministry of textiles, S.B. Mohapatra, and the country’s permanent representative to the WTO K.M. Chandrasekhar, both of whom addressed the conference, the latter in his capacity of chairman of the Geneva-based International Textiles and Clothing Bureau (ITCB). Other members of the delegation included the joint secretary, K.K. Jalan, and several industry representatives, including the corporate president of Raymond Ltd V.K. Bhartia; senior vice-president of Reliance Industries, polyester sector, Bharat Desai; director of Arvind Products N. Parikh and the president of the Tirpur Exporters Association, A. Sakthivel. A key issue was whether the benefits of quota elimination will be spread evenly; another related to the likely changes under the Doha Development round of trade negotiations, the so-called Doha Development Agenda (DDA). But the question uppermost in the minds of representatives of many developing countries was whether tariffs, non-tariff barriers (NTBs) and trade defence measures, notably anti-dumping investigations, will replace quotas in the 15-nation EU. The EU’s trade commissioner made it clear that the answer lay with the developing countries themselves. “The disappearance of quotas will increase the importance of other obstacles to trade,” he pointed out, adding, “As water levels fall, other restrictions might appear.” For Lamy, the on-going Doha round of trade negotiations offered the best way of safeguarding the benefits to developing countries from the elimination of quotas. The EU was prepared to negotiate substantial reductions to textile and clothing tariffs in Geneva, provided countries with high tariffs undertook to reduce theirs. However, a substantial cut in the EU tariff on clothing is the last thing that countries such as Bangladesh want. This was made clear by the country’s trade minister AKM Chowdhury, and other members of the very large delegation from Bangladesh. The elimination of quotas from 2005 onwards is expected to hit Bangladesh’s exports particularly hard. Its delegates, not surprisingly, made it clear that they expect the EU to safeguard their export interests through its generalised system of preferences (GSP). However, a continued fall in EU tariffs will only erode GSP benefits. Representatives of the EU’s textile and clothing industry made it abundantly clear that they will resist any reductions in EU tariffs, unless developing countries, and India in particular, bring down their tariffs to the much more acceptable level of 15 per cent.
