WTO BODY OFFICIALLY RULES AGAINST US ON UNDERWEAR

WTO BODY OFFICIALLY RULES AGAINST US ON UNDERWEAR

The Textiles Monitoring Body delivered a final ruling by consensus here Friday that imports of underwear from developing nations had not caused any serious damage to U.S. industry.

The TMB found that "serious damage as envisaged . . . had not been demonstrated," according to a copy of the ruling obtained by The Journal of Commerce.The 10-member body, which referees disputes in global textiles and apparel trade, said it "could not, however, reach consensus on the existence of actual threat of serious damage."

The two rulings apply only to the action taken by the United States against imports from Costa Rica and Honduras.

Washington in late March formally notified eight countries that their underwear and nightwear exports to the United States were hurting the U.S. industry and therefore would be restrained.

Negotiated settlements were reached with four of the countries - Jamaica, the Dominican Republic, Colombia and El Salvador - but the dispute remained unresolved with Costa Rica, Honduras, Thailand and Turkey.

The matter was taken up by the TMB, an arm of the World Trade Organization that sets rules for most world trade.

On Friday, Washington decided "to rescind the safeguard measure" against Thailand, freeing up that country's underwear and nightwear exports to the United States. U.S. negotiators also reached a "mutually agreeable settlement" with Turkey during the TMB proceedings, a senior Turkish diplomat said.

Western diplomatic sources confirmed that Turkey and the United States signed a memorandum of understanding effective Jan. 1, 1996, under which Turkey has been allocated a quota of 2.2 million dozen of underwear and also a lucrative 546,000 dozen of knit shirts.

Members of the U.S. delegation declined to comment on the U.S.-Turkish accord.

On the unresolved question of the existence of an actual threat of serious damage, the TMB recommended that further consultations be held between the United States and the parties concerned, with a view to arriving at a mutual understanding.

The consultations must be concluded within 30 days as stipulated by the TMB.

The TMB Thursday was split 5-4 in favor of the view that exports to the United States from Turkey, Honduras, Costa Rica and Thailand would present no future threat to U.S. industry.

The four nations argued that if the TMB saw no serious damage from their imports now, it followed that there would be no future threat.