December 22, 2005 -- The National Textile Association (NTA) reported from Hong Kong on how the discussions with the World Trade Organization (WTO) Ministerial would affect the textile industry, in particular.
Three major areas of concern were raised:
A textile ?sectoral? would allow textiles to be subject to different rules from other products in recognition of their significance and the particular issues that set this sector apart from others. A textile sectoral would be a possible vehicle for addressing true market access for U.S. textiles in countries such as India, Egypt and China, which are all basically closed to the United States now.
The goal of NTA was to get the concept of sectorals incorporated in the text; with sectorals in the text, there is an opportunity to push to get a textile sectoral in the final Doha Round agreement.
The United States has one of the freest markets for textile and apparel products and our tariffs are relatively low compared to other countries. The ministers opted for tariff reductions under the ?Swiss Formula.?
According to NTA, under the Swiss Formula, countries with high tariffs must reduce by a higher percentage than countries with low tariffs, but their tariffs will still, in absolute numbers, be substantially higher. So the United States, with low tariffs to begin with, will have to lower tariffs to levels that afford little, if any, protection for our textile industry.
In the third concern, the ministers agreed that the United States and other developed countries shall provide duty-free access to all LDCs, specifying 32 countries that fall into this category.
There is a measure of protection for the United States in that the text does permit this country to fall short of the ?all products from all LDCs? requirement if duty-free access is provided to 97 percent of the products, by tariff line, that are imported from LDCs.
These are complex and difficult negotiations. However, according to the NTA correspondence, ?We won the first one, lost the second one and have a mixed result on the last one.?
Staff contact: Peter Orwick, ext. 33