TURKEY REPEATS CALL FOR WTO REVIEW OF TEXTILE QUOTA PHASEOUT; CHINA OPPOSED

Turkey has once again called for the establishment of a formal WTO work programme to review the ramifications of the removal of quotas on textile and clothing trade at the end of 2004, raising the ire of other exporters, including India and China. It most recently reiterated its request at a 19 March meeting of the WTO Council for Trade in Goods (CTG).

The effects of the quota phase-out have been hotly debated. For instance, Turkey asserts that least-developed countries have faced increased job losses, while China has experienced a dramatic expansion of its textile exports to major markets.

In a communication to Members dated 6 March 2007 (G/C/W/673), Turkey announced its plans to advance its proposal for a comprehensive review of the consequences of the phase-out, along with an examination of how developing countries might diversify economies heavily reliant on the textiles and clothing sector (see BRIDGES Weekly, 16 November 2005). Turkey claimed that its proposal had "the support of a vast majority" of Members.

The Turkish delegation justified the timing of its move for a work programme, the first since April 2006, by arguing that sufficient time had elapsed to provide enough data for a reliable analysis of the effects of the eradicated quotas. Increased support from other Members, such as Jordan, El Salvador, and the US, also played a role in Turkey's decision.

Turkey's submission proposed an outline for the work programme, suggesting that it analyse production, trade, and investment in the sector before and after the quota phase-out; examine future developments that could affect the industry (including the Doha negotiations); and provide increased access to information on policy options and technical advice for countries struggling with the transition.

At the recent CTG meeting, Members including China, India, Indonesia, and Thailand expressed opposition to the Turkish proposal. The Indian delegation cited "systematic issues" as its cause for opposition and said that they would continue to veto it in the future. China made a lengthy statement contending that Turkey had no policy-based reasons for disagreeing with the quota elimination, but was simply targeting the Chinese market directly. It promised to resist any move to limit its textile exports.

Members thus remain far from consensus on the Turkish proposal. The next meeting of the Council for Trade in Goods is scheduled for 21 May.

ICTSD reporting.

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DISPUTE PANEL TO RULE ON EU'S BANANA IMPORT REGIME

WTO Members on 20 March agreed to establish a panel to examine whether the EU's banana import policies violate multilateral trade rules, in response to a complaint by Ecuador. Brussels blocked Ecuador's initial request for a panel earlier this month, but was prevented by WTO practice from doing so a second time when Quito repeated its request at a meeting of the Dispute Settlement Body.

The spat, which has lasted for over a decade, pits several Latin American banana producers and the US, against the EU's trade preferences for bananas from its former colonies in the African, Caribbean, and Pacific (ACP) group of countries.

Since the late 1990s, Ecuador has claimed that Brussels' banana import rules violate its WTO obligations, including a series of adverse dispute rulings, by discriminating in favor of bananas from ACP countries. It remains unhappy with the EU's latest reform, introduced at the beginning of 2006, under which it levies a 176 euros per ton tariff along with a duty-free quota of 775,000 tonnes for ACP bananas (see BRIDGES Weekly, 28 February 2007).

The EU's reformed banana import regime was supposed to "at least maintain total market access" for countries like Ecuador that did not benefit from preferences. Quito claims that this has not been the case, and that since 2006, its exports have fallen by 3 percent. Brussels refutes these numbers.

Brussels expressed disappointment with Ecuador's decision to pursue the creation of a panel to rule on its compliance with WTO obligations. Spokesperson Michael Mann said that bilateral consultations aimed at settling the spat "were going rather well."

The long-running dispute, with its various rulings against the EU, has generated much debate about the ability of developing countries to enforce WTO rulings, particularly against major developed economies.

The panel will have 90 days to issue its opinion.

ICTSD reporting, "WTO to Rule Whether EU Still Flouts Decisions on Banana Imports" BLOOMBERG, 20 March 2007.