The Hindu Business Line : EU plans to eliminate textile quotas soon

AS part of implementing one of the key commitments at the end of the last WTO Trade Round ("Uruguay Round") in 1994, the European Commission (EC) has adopted a proposal for the elimination of the quotas applying on imports of textile and clothing products from the WTO member countries. This proposal will now be sent to the EU Member States for its adoption so that quotas can be removed by January 1, 2005.

The EU customs will be nevertheless checking until March 31, 2005 the respect of 2004 quotas for textile products shipped to the EU before the end of 2004.

The Commission has also proposed the introduction of an automatic import licencing system for import of certain textile and clothing products.

"The EU will scrupulously respect its WTO obligation to eliminate textiles and clothing quotas by 2005. But we will also closely follow imports after that date to be able to react in case of serious market disruption, using the means available under the WTO rules," a communiqué from Brussels attributing to the EU Trade Commissioner, Mr Pascal Lamy, said.

The European Commission's proposal for a Council Regulation in detail includes, among others, eliminate all quotas applied to the import of textile and clothing products from the WTO countries, as of January 1, 2005.

Currently, the EU applies 210 quotas for the import of textiles and clothing products from 11 WTO countries or territories (Argentina, China, Hong Kong, India, Indonesia, Malaysia, Peru, Philippines, Taiwan, South Korea and Thailand), which have been in force under bilateral agreements concluded under the former GATT Multi-Fibre Agreement in the 1970s.

To ensure the respect of the bilateral textile agreements, goods shipped before January 1, 2005 and subject to quotas in 2004 shall be subject to the import regime prevailing in 2004, even if they are presented for customs clearance after January 1, 2005.

However, in order to avoid excessive burdens on trade and customs, from April 1, 2005 all such goods will be allowed to enter the EU freely.

In order to follow closely imports of the most sensitive textile and clothing products, a monitoring system will be set up for the Chinese imports.

Such scheme will be compatible with the WTO rules on import licencing, and destined to ensure a smooth transition to a quota-free system as from January 1, 2005.

The WTO Agreement on Textile and Clothing (ATC), which established a ten-year period for the elimination of the quotas, will expire on December 31, 2004 and from January 1, 2005 trade in textile and clothing products will be subject to the general GATT rules, which proscribe the imposition of quantitative restrictions for imports.

The Commission proposal intends to comply with this key WTO obligation.

The EU already eliminated 56 bilateral quotas in 2002 under the third stage of integration of the ATC.