International agency Oxfam says that rich countries are back-sliding on commitments to open up their clothing and textile markets to developing country competition.
Textile industry groups are now lobbying governments to break their promise and extend the quota regime. Oxfam is also worried that rich countries are increasingly putting up other barriers to developing country competition, including charging excessive tariffs.
These reactions are undermining one of the most significant victories ever won by developing countries in international trade negotiations -- the end, on January 1 2005 after 30 years, of the multi-fibre agreement (MFA) that allowed the rich world to set quota barriers on cheaper textile imports.
The quotas, together with high tariff charges, cost developing countries $40 billion a year and 27 million lost jobs. Oxfam's Make Trade Fair campaign lead Phil Bloomer said:
"The MFA was one of the most pernicious weapons in the rich world's arsenal of protections. For every job it protected in the rich world, 35 jobs were lost in the developing world. This industry is vital for poor countries. It employs more than 30 million people, most of them women, and MFA reform was to give them a fair chance of trading their way out of poverty. The rich world must not be allowed to renege on the spirit of the deal made to scrap it."
Oxfam is worried that rich trading blocs -- especially the EU and the US -- are readying for a protectionist backlash to claw back the power they would lose along with the MFA.
They impose high and discriminatory tariffs on textile imports, the agency says. For example Cambodia's exports to the US, which are made up mainly of clothing, attract $152m in tariff duties while Norway's exports attract just $24m even though the value of Norwegian trade is five times higher than Cambodia's. The US and EU are also abusing "rules of origin" and "anti-dumping" measures to block competitive imports from developing countries.
Some argue that quotas should be maintained due to poor working conditions in many textile exporting countries. However, denying these countries access to rich markets will do nothing to improve their labor conditions and living standards. Oxfam says that developing country governments and multinational companies should use the opportunity of expanded market access to improve labor conditions.
The rich world negotiated a 10-year "breathing space" to phase out MFA quotas but -- under pressure from industry lobby groups -- delayed lifting the most economically important quotas until the last moment. Smaller exporters that did benefit from the MFA restrictions that were put on China and India and other big exporters will face a sharp shock as quotas are removed. Bangladesh and Sri Lanka, for instance, might lose hundreds of thousands of jobs overnight and rich countries must help them with aid, retraining assistance and better deals on trade. Meanwhile, retailers and their suppliers must not "cut and run" from them.
Oxfam proposes that in next week's market access negotiations, WTO members commit to ease 'rules of origin' on LDC textile exports, and to give urgent financial and technical assistance and temporary preferences for non-LDC developing countries that are vulnerable to the lifting of quotas.Oxfam:
