Textiles - General Agreement on Tariffs and Trade negotiations

At Punta del Este in 1986, the United States and other contracting parties agreed to attempt to reintegrate textiles into the GATT. International trade in textiles and apparel has been governed for almost 30 years by special arrangements that are authorized by the GATT but are more restrictive than the normal rules of the GATT. Textiles exports are currently managed according to the Multifiber Arrangement (MFA), in effect since 1974.

The countries that have been most keen in seeking a "reintegration of this sector into GATT" are those developing countries that are large exporters of textiles. Obviously, they often face quotas imposed under the MFA. On the other hand, the developed countries which import textiles have emphasized the "strengthened GATT rules and disciplines" language in the negotiating mandate, suggesting that the exporting countries must also contribute to reintegration by applying greater discipline over their own trade regimes.

The United States submitted an initial proposal to the Negotiating Group on Textiles in September 1989. The U.S. paper affirmed our commitment to the Punta del Este Declaration on textiles. However, the United States emphasized that any process of integration must address all trade distorting measures not now integrated into GATT. In addition, the United States, as well as the European Community and Canada, has stated that there will have to be a relationship between progress in the Negotiating Group on Textiles and the work of other negotiating groups.

This year, we made a formal proposal on options for transition from the MFA to pure GATT rules. The U.S. proposal calls for examination of new options, in addition to the MFA, that could be used as the transitional mechanism-namely, a global quota system or a tariff rate quota system. The proposal recommends a ten-year term of transition. According to the global quota approach, bilateral quotas would continue to be maintained for countries now subject to quota restraints under the MFA, and would be held constant over a ten-year transition period. However, provisions for growth in trade would be in the form of a growing global basket quota which would apply to, and be open to competition from, all countries (with a few exceptions).

The Chairman's report to the July Trade Negotiations Committee (TNC) contains this option as well as three others for the integration aspects of a transition regime. It also provides various ideas on how to establish a relationship between a liberalization on textiles to measures to strengthen GATT rules and disciplines. Two of the options (proposed by the United States and Canada) call for MFN-based quotas. Two others (proposed by the EC and by a group of textile exporting countries) call for continuation of a selective system based on current restraints under the MFA. Under all options, restraints would be liberalized over the life of the transition period.

In the U.S. statement at the TNC, we stressed that negotiators on textiles must get down to brass tacks by drawing together the various elements now on the table into a creditable transition arrangement with adequate safeguards for all concerned.

For additional information, contact Michael Hutchinson at (202) 377-2044.

COPYRIGHT 1990 U.S. Government Printing Office
COPYRIGHT 2004 Gale Group