US URGED TO DROP ACTION AGAINST HONG KONG WOOL

US URGED TO DROP ACTION AGAINST HONG KONG WOOL

The global trade referee for textiles and clothing Thursday recommended that the United States drop its move to restrain wool imports from Hong Kong, senior diplomatic sources said.

The Textiles Monitoring Body of the World Trade Organization examining a complaint brought before the 10-member body by Hong Kong ruled that the U.S. ''call" on category 440 - wool shirts and blouses - imports from Hong Kong, was not justified and recommended that the measure be dropped, the sources said.WTO succeeded GATT this year as the international body that governs trade throughout much of the world.

A call is formal notification from the United States that a county's exports are damaging U.S. industry and that the United states wants to impose restraints.

The TMB ruling noted that the Hong Kong exports in question were already under restraint under a group limit previously put in place by the United States.

The Agreement on Textiles and Clothing, part of the Uruguay round liberalization accords, rules out applying any safeguard measure "on any member whose exports of a particular product are already under a restraint agreement." These accords will oversee the phaseout of the Multi-Fibre Arrangement (MFA) and the reintegration of textiles and clothing within the purview of WTO rules over a 10-year period.

"We're quite happy about the ruling," said Sanjoy Bagchi, director of the International Textiles and Clothing Bureau, which lobbies on behalf of textile-exporting developing nations.

"It confirms what we have been saying all along, that a product under a group or aggregate limit cannot be revisited by safeguards," he added.

Members of the U.S. team were en route back to Washington and unavailable for comment.