Lamy bids to open up global textile trade

Date: 18/05/2000

By Shada Islam

Textile-exporting nations hoping to sell more of their goods in an expanding European market will have to make reciprocal moves to slash market barriers to Union exports, under proposals drawn up by the European Commission.

Under the plan, due to be unveiled next month, the Commission will ask countries such as India, Pakistan, China, Thailand and other textile-exporters to lower their own tariffs and remove tax, customs and other obstacles which hamper sales of Europe's high-quality garments worldwide in order to secure improved access to the EU market.

Trade Commissioner Pascal Lamy has told the world's top textile-exporters that the Union will press ahead with plans to further liberalise 18% of EU clothing and textile imports in 2002, as required under the World Trade Organisation agreement on textiles and clothing (ATC).

But the product-content and commercial value of the new Union liberalisation package will depend on whether Asian and other textile-exporting nations also make moves to dismantle their high market-access barriers.

"The Commission is telling its trading partners that if they are really interested in improved access to the EU textiles and clothing markets, they should be ready to offer liberalisation on their markets," said Lamy recently.

The Uruguay Round trade package agreed in 1994 commits WTO members to a gradual stage-by-stage removal of import quotas and other restrictions, with total free trade in textiles and apparel foreseen as of 2005. The Union has already liberalised about 33% of its total textile and clothing imports, with another 18% scheduled to be freed up in 2002.

But although the EU has kept to the letter of its WTO commitments, textile-exporting nations claim the Union's moves so far have been disappointing, with liberalisation limited to items of little commercial significance. "Products like t-shirts, trousers, shirts - where EU quotas really bite - are still under restraint," says an Asian trade official. "If the EU wants to really keep to the spirit of the ATC, these are the categories which should be freed for export."

The Commission's new strategy reflects long-standing demands from Europe's textile manufacturers for tougher action to prise open highly-protected markets, especially in Asia. Euratex, the influential textile and clothing industry lobby group, argues that while Union tariffs are coming down in response to WTO provisions, many textile-exporting countries still maintain import tariffs ranging between 13 and 40%. There are compounded by high customs duties, taxes, licensing requirements, certification rules and other non-tariff barriers which discourage imports of European goods.

In contrast to industry demands, European importers and retail groups have called for a more rapid phasing out of EU textile and clothing quotas.

Textile-exporting nations hoping to sell more of their goods in an expanding European market will have to make reciprocal moves to slash market barriers to Union exports, under proposals drawn up by the European Commission.