FAIR QUOTAS FOR TEXTILE EXPORTERS HELD VITAL

FAIR QUOTAS FOR TEXTILE EXPORTERS HELD VITAL

The next six months will be critical for the current round of multinational trade talks, especially on textiles and garments, Hong Kong's trade chief said Tuesday.

"In respect of textiles and clothing, the round offers a unique opportunity to reverse thetrend of relentless, selective and discriminatory treatment" aimed mainly at developing countries' exports, said John Chan, secretary for trade and industry. He spoke to a meeting of the International Textiles and Clothing Bureau, a group of producing nations.Three groups of importers are jostling to influence the forthcoming textile rules under the Uruguay Round trade talks: importers, traditional exporters and newly active exporters. Hong Kong has been a textile heavyweight for many years, in company with South Korea, Taiwan and China.

Other Asian nations, especially in the Indian subcontinent, are working hard to bolster their share of a world market estimated to be worth US$177 billion a year.

"The chosen (method of textile regulation) must cause minimum disruption to trade," Mr. Chan said. "It must accord equitable development among suppliers and provide greater market access for all exporters," he added.

He favors an arrangement that would allow the newer textile exporters to make gains without injuring the previously dominant exporters.

The "global quota" idea, floated by the United States and Canada, fails to meet these criteria, Mr. Chan declared. "It is abundantly clear there is a consensus-minus-two" for adopting another system.

The textile question is part of the Uruguay Round of trade talks conducted under the aegis of the General Agreement on Tariffs and Trade, a Swiss-based body that tries to ensure free trade.

Textile trade is currently governed primarily by a Multi-Fibre Arrangement. That regimen, expiring in 1991, controls textile and clothing trade through a quotas imposed by importing developed countries, chiefly the United States and European Community.

The Multi-Fiber Arrangement encourages importers to allocate quotas on a bilateral basis after negotiations.

The exporters' International Textiles and Clothing Bureau should develop a further detailed proposal for presentation at next month's negotiations between it and importers, Mr. Chan urged.

The textile group was formed in 1985 to coordinate and promote freer trade. This week's meeting in Hong Kong is being attended by 50 representatives of 19 exporters.

Failure to resolve textile matters within the Uruguay Round "would have extremely serious implications for the development of world trade and would be in nobody's interest, developed and developing participants alike," Mr. Chan warned.

The Bush administration's revised textiles trade proposal at the Uruguay Round negotiations would guarantee existing foreign suppliers minimum levels of access to the major textile markets, such as the United States.

During a proposed transition period toward freer world textiles trade - a period that might take about 10 years - those suppliers would be allowed import quotas of at least the average of their 1987-89 shipments.

This guaranteed mininum is described as a way to help win the support of major textile exporting countries, such as Japan, Hong Kong, Taiwan and Korea, for a liberalization of world textiles trade.

As in an earlier U.S. proposal, suppliers could sell unused portions of their quotas to other supplying nations.

The United States is the world's largest market for textiles and garments. It bought US$4.6 billion worth from Hong Kong alone last year, about half the colony's total textile and garment exports.

Mr. Chan described as constructive some of the proposals made by big importers for phasing out the current controls. Others, however, "put forward a radical new modality which would bring grave uncertainty to the trade and be more restrictive." He was referring to the U.S. global quota concept.

Branding this unacceptable, the official said any new system must provide certainty and predictability to exporters as well as importers.