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23 textile groups urge WTO to re-examine DFQF initiative
Oct '08
On September 25th, 2008, 23 textile groups from Africa, South America and North America urged the WTO to re-examine the assumptions under the proposed Duty-Free Quota Free (DFQF) initiative in the Doha Round and to exclude sensitive textile and apparel items from the initiative.

The groups, which were represented by Cass Johnson, President of the National Council for Textile Organizations (NCTO), presented current trade data showing that Bangladesh and Cambodia, the two least developed countries (LDCs) that would benefit from the DFQF initiative, are already taking large amounts of market share from other LDCs as well as vulnerable economies in the Western Hemisphere and Africa.

Johnson explained that those regions were already showing sharp drops in export trade and large job losses. Johnson spoke as part of a panel on the DFQF initiative during the “Trading into the Future” Forum at the WTO last week.

Noting that Bangladesh and Cambodia have boosted their exports by 90 percent since 2001, an increase of $2.6 billion, while exports from the AGOA countries, other LDCs and Western Hemisphere countries have dropped by billions of dollars, Mr. Johnson asserted that giving the two LDCs new larger tariff benefits could “cause a development crisis” effecting millions of workers in those regions who are already seeing widespread job losses.

Mr. Johnson pointed out that Bangladesh textile organizations have recently boasted that they had become more competitive than China in key categories and are predicting that their worldwide exports will triple over the next five years, to more than $25 billion.

Mr. Johnson recommended that Bangladesh and Cambodia, already among the proven “winners in the post quota world,” should only be given duty free status on tariff lines which are not sensitive to either African countries, LDCs, Haiti, or other vulnerable developing economies, such as the CAFTA countries, which depend on textile exports for as much as 65 percent of their exports.

The DFQF agreement in the Doha Round requires that upon successful conclusion of the Round, developed countries commit to making 97 percent of their tariff lines duty-free. Bangladesh and Cambodia have pushed for 100 percent coverage. Under 100 percent coverage, apparel tariff lines which African and Western Hemisphere and other LDCs depend on for billions of dollars of exports each year would face duty-free competition from Bangladesh and Cambodia. The United States already grants duty-free status for all LDCs except Bangladesh, Cambodia and Nepal.

DFQF WTO statement

National Council for Textile Organizations

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