Fighting for WTO's ear
June 21, 2004,
Representatives of textiles trade groups acknowledged they face an uphill battle in their efforts to prompt an emergency session of the World Trade Organization. However, following a three-day summit here, groups from 22 nations including the United States said they have mapped out a battle strategy in their quest to see quota restrictions extended until 2008 on China and a few other, unnamed countries.
Speaking at a press conference last week following the close of the Summit on Fair Trade in Textiles and Clothing, representatives noted that many of the trade groups participating in the effort hail from poor, developing nations that are especially vulnerable to unchecked competition from China.
The group — which has coalesced over the past three months around the Istanbul Declaration demanding an emergency WTO meeting — said it is not opposed to Chinese trade per se, but seeks an even playing field.
"China as part of its accession agreement (when joining the WTO) agreed to eliminate unfair trade practices," said Auggie Tantillo, executive director of the American Manufac-turing Trade Action Coalition.
He said China's textiles industry benefits from access to non-performing loans as well as state subsidies and export rebates. "It's time to stop babying the Chinese," he added. "If they're going to be an export superpower, they need to play by the rules."
To buttress the group's argument, the Washington-based National Council of Textile Organizations released research during the summit that it claimed is predictive of the rapid impact of China's exports under a quota-free system.
The study tracked imports in 25 apparel categories that were removed from quota control 28 months ago. China's market share in those categories exploded from 9 percent in 2001 to 64 percent as of March 2004. The second largest supplier in those categories, Thailand, saw its market share reduced from 10 percent to 4 percent during the same period.
The average price on the quota-free goods in those categories fell from $6.23 in 2001 to a low of $2.65 in December 2003. The price had inched up to $3.12 by this past March, the study noted, "as China consolidated its hold on these markets and was thus able to retreat from the severe cost-cutting that enabled it to secure dominant share."
It takes only one member country to put the issue of a meeting on the WTO agenda for consideration. Thus far, no nation has called for such an action. The Bush Administration has stated that it will not interfere in the quota elimination on Jan. 1, 2005.
Said Karl Spilhaus, president of the (U.S.) National Textile Association, "This is an ambitious project, there's no question about that. But the situation calls for it."
Changes in Import Market Share
Quota Free Apparel Categories
|Source: National Council of Textile Organizations.