United States Of America : WTO Head Suggests Pre-Deadline Easing of Textile Quotas

Supachai Panitchpakdi, director-general of the World Trade Organization (WTO), says the United States, European Union (EU) and Canada should consider lifting some textile trade quotas before the December 2004 deadline for eliminating all of them.

In a May 5 speech in Brussels, Supachai said that those importing countries have so far technically fulfilled their WTO obligations on implementing the 1994 Agreement on Textiles and Clothing (ATC) from the Uruguay Round of multilateral trade negotiations.

Yet 80 percent of textile quotas remain in place until the final phase of implementation: 239 maintained by Canada, 167 by the EU and 701 by the United States, he said. Because elimination of restrictions on the most sensitive items remains ahead, he said, the adjustment would be abrupt.

"The countries required to make this effort have all expressed their commitment to stick by their WTO obligations," Supachai said. "To soften the impact of reform, restraining countries [those imposing quotas] could consider the possibility of voluntarily and gradually eliminating some of these restrictions between now and the end of 2004."

So far the countries with quotas have rejected suggestions for accelerating their elimination.

Supachai said full implementation of the ATC should result in not only efficiency gains for producers and lower costs for consumers but also political gains related to the credibility of the multilateral trading system.

Supachai warned developed and developing countries not to seek new protections in the event that some of them derive more benefits than others from elimination of textile quotas. Without elaborating he supported some sort of assistance for developing countries unable to compete in the more open textile markets ahead.

"But the solution is not to invent new distortions," Supachai said.

He also warned importing countries not to employ antidumping duties unfairly as a substitute for textile quotas.