Garment Industry Debates Possible WTO Quota Extension

Though a top garment industry official said Tuesday that Cam­bodian manufacturers would join an international call for the World Trade Organization to extend worldwide garment quotas be­yond this year, Minister of Com­merce Cham Prasidh said the industry would be better of without the quotas.

“Only quota-free would allow us to expand,” Cham Prasidh said Tues­day. “No quotas would be better for us.”

About one month ago, Turkish and US garment manufacturer groups requested that an emergency conference of the WTO be held before July 1 to extend the quota system, set to expire after this year, until the end of 2007.

Singling out China, which already accounts for 20 percent of global textile and garment production, the declaration accused “a few dominant countries” of distorting trade through deliberate currency undervaluation and state subsidies. The statement, officially known as the Istanbul Declaration, has recently been endorsed by garment producers in Mexico, Italy, Belgium, Austria and 10 African countries.

“The phase-out of textile and clothing quotas was intended to liberalize trade for all nations, not to ensure domination of world trade in textiles and clothing by countries that use unfair trade practices,” the declaration said.

“The creation of a monopoly position by a very few countries will be disastrous to the health and well-being of the many developing world economies that are dependent on this vital export sector.”

In a rebuttal printed by the state-run Xinhua news service on Sunday, China said the Istanbul Declaration “indicated that the besiegement against Chinese textile exports may be intensified.”

It added: “If the quota-removal is postponed, the credit of [the] WTO will be severely tarnished.”

As Cambodia’s garment industry employs about 230,000 mostly female workers and accounts for nearly all of the country’s exports, the government and the private sector have sought to brand the na­tion as labor-friendly to attract a niche market of socially conscious buyers once the quotas expire.

Whether or not that will sustain the industry is unknown, and garment producers said Tuesday they would welcome extending the worldwide quota system.

“I don’t see this as likely, but if it is a worldwide initiative, Cam­bodia would be more than willing to put its name in,” Ken Loo, secretary-general of the Garment Manu­facturers Association in Cam­bodia, said of the Istanbul Dec­laration.

If Cambodia joins the WTO and the quotas expire at the end of the year, it will have increased market access that some of its neighbors which are not WTO members will lack. Though this will give Cam­bodia a regional advantage, it will also put the country on a level playing field with garment giants such   as China, India and Pakistan.

Without the quota safety net, some fear that high corruption, electricity and transportation costs could push away some factories.

Cham Prasidh met Tuesday with US Congressman George Miller, a longtime advocate of linking labor standards with trade agreements, said David Gainer, US Embassy spokesman. Al­though Miller has been an outspoken critic of China’s trade practices, Gainer said he and Cham Prasidh did not discuss extending the quota system. Gainer would not say wheth­er the US has formally asked the WTO to ex­tend the quota deadline.

 

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