Move To Block Quota Access May Shrink Third World Fabric

New Delhi, July 30: | Updated: Jul 31 2003, 05:30am hrs
India, along with a few other developing countries , has warned the World Trade Organisation general council against attempts being made by industrialised countries to deny them the facility of carry forward of quotas from January 1, 2005 after termination of the agreement on textiles and clothing from this date. They apprehend that the move will result in a significant reduction in their market access opportunities.

In a paper recently submitted to the council, India, China, Pakistan, Indonesia, Brazil, Bangladesh, Thailand, Egypt and Vietnam pointed out that the advance use of quota access through the carry forward provision incorporated in the above agreement should be made available to the Third World during 2004. The intention was to provide substantial flexibility to facilitate textile trade in accordance with market conditions in the importing countries, the paper said.

Any reduction in quota access would also excerbate the situation created by industralised countries such as the US, European Union and Canada while implementing the agreement. For instance, there was backloading of quotas at the end of the 10-year transition period, that is on December 31, 04. It would add to the adjustment shock when all the quotas were finally terminated from January 1, 05.

Moreover, the paper said the denial of carry forward and consequential constraint on supplies would generate uwpard pressure on prices in 2004. With the termination of quotas from 05, the sudden fall in these prices would in turn encourage protectionism in developed country members to cry dumping and add to the problems brought about lack of any liberalisation of quotas under the agreement.