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Home > Business > PTI > Report

End of textile quotas: China, India to gain

T V Parasuram in Washington | June 10, 2004 20:37 IST

Warning that the scheduled end of quotas for textiles by the end of this year will benefit China and, to a lesser degree, India, 117 US lawmakers have urged the American President George W Bush to demand an emergency World Trade Organisation meeting to discuss the issue.

The end of worldwide quotas will cost 30 million jobs in the United States, Europe and a slew of developing countries other than China and India, the lawmakers warned.

"The beneficiary would be China, and to a lesser degree India, as the low-cost producers rapidly claim a large chunk of the world markets," they said.

"The Chinese domination of global textile and apparel trade will shake the economic and political stability of dozens of struggling nations," said the letters from 13 Senate Republicans and 16 Senate Democrats, and 34 Republican and 54 Democrats from the House of Representatives.

Bush was urged to "reconsider the wisdom of allowing worldwide quotas on textile and apparel products to expire."

Among those who signed the request for an urgent WTO meeting is Democratic Presidential candidate John Kerry.

The result of ending quotas, according to industry groups, will be a loss of 650,000 American textile and apparel jobs and even more severe losses in other nations.

"Many of our key allies in the war on terror as well as strategic trading partners will quickly see millions of their workers put out on the street," said the letter naming Turkey,
Egypt, Indonesia, Bangladesh, Philippines, Mexico, nations of sub-Saharan Africa, Central America and South America.

The 10-year textile quota phase-out was originally meant to help developing nations by giving them greater access to the US and European markets. It was also likely to bring down prices.

However this year, 81 textile and apparel associations from more than 30 countries have asked for an extension of the quotas until 2007.

The US and other industry groups say that China's December 2001 accession to the WTO and the country's subsidies to its manufacturers "unfairly tilt the market."

No government has so far backed an extension.

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