INTRODUCTIONA. STRUCTURE OF TRADE:1. Trade in the textiles and clothing constitutes a significant component of the world economy.According to the figures of 2004, textiles and clothing trade accounts for 5.1 percent of total worldmerchandise trade and represents one of the most dynamic sectors worldwide. The morelabor-intensive clothing industries correspond to 57 percent of total textiles and clothing trade. 12. In 2004, exports in textiles amounted to 2,2 percent of world merchandise exports, worthabout 195 billion US Dollars. Exports in clothing products, on the other hand, accounted for2,9 percent of world merchandise exports and it was valued at 258 billion US Dollars.23. Textiles and clothing sectors harbor a significant number of tariff peaks and tariff escalations.Moreover, there is huge gap among the tariff rates of the WTO members in a variety of products.B. ECONOMIC GROWTH AND DEVELOPMENT:4. The textiles and clothing industries stand out in the global economy with an exceptionalsignificance in the economies of developing countries. These sectors have an important share in theexport earnings of developing countries and provide employment opportunities to young andunskilled workforce most of whom are women.5. Developing countries now account for half of world textiles exports and almost three quartersof world clothing exports. In sum, the textiles and clothing sectors have been the locomotive ofeconomic development for many developing countries due to the above-mentioned characteristics.6. Many least developed and developing countries depend on these sectors which, in certaincases, account for more than 80 percent of total exports and more than 50 percent of totalemployment. For instance, textiles and clothing exports together represent 86 percent of Bangladesh’stotal exports. This ratio is 80 percent for Cambodia; 74 for Pakistan; 57 for Mauritius and 56 for SriLanka.3 In Europe, Turkey and Bulgaria are the most dependent countries on the sector.7. With regard to the import side, major importers in the sectors are basically the United Statesand the European Union (EU) together with Japan. Developing countries are to a large extentdependent on these key destinations of import for their textiles and clothing products.1 World Trade Organization, International Trade Statistics, 2005.2 Ibid.3 International Labor Organization (2005), Promoting Fair Globalization in Textiles and Clothing in apost-MFA Environment, International Labor Office, Geneva.JOB(06)/60Page 2II. BACKGROUND8. Until recently textiles and clothing sectors were the only major manufacturing sectors that didnot come under the rules of the General Agreement on Tariffs and Trade (GATT). Trade in theseindustries was instead subject to use of quotas by major importing countries.9. In this sense, the year 2005 heralded a vital change in world trade in textiles and clothing. Theintegration of trade in textiles and clothing to the World Trade Organization (WTO)’s general rulesand disciplines has rendered customs tariffs as the only tool for protection. Nevertheless, this newperiod with new and unprecedented challenges have coincided with the tariff reductions that will berealized in scope of the Non-Agricultural Market Access Negotiations (NAMA) of the DohaDevelopment Round. In that, the only means of protection in this new era will also be trimmed.III. BUILDING AN INITIATIVE OF HARMONIZATION FOR TEXTILES ANDCLOTHING10. It is believed that the harmonization of the tariffs of all WTO members would be the rightmethod to address the specific needs of the textiles and clothing sectors. Turkey asserts that textilesand clothing sectors be treated on their own merits since the economies of developing countries arehighly dependant on those sectors.11. The initiative, proposed in this paper, like the Chemicals Tariff Harmonization Agreement(CTHA), highlights the “harmonization approach” and allows differentiated treatment of variouschapters of the textiles and clothing sectors. With this method, it is possible to reach a lower rate ofreduction in the tariff rates of member countries in comparison to a formula while going for deepercuts in certain sub-categories. This way, general liberalization can also be reached in scope of theinitiative.12. In this framework, it is important to keep in mind that this initiative should be consideredoutside the scope of traditional proposals for sectorals that aim basically at further liberalization thanthe formula.The proposed initiative will also deal with trade-distorting practices and Non-Tariff Barriers (NTBs)in a comprehensive and coherent manner.13. The advantages of such an initiative are:- In line with Paragraph 16 of the Doha Declaration, reducing or as appropriate eliminatingtariff peaks, high tariffs and tariff escalation, in particular on products of export interest todeveloping countries,- Paving the way for increased South-South trade,- In line with Paragraph 16 of the Doha Declaration, reducing or as appropriate eliminatingNTBs.IV. PRODUCT COVERAGE14. A suggested product coverage for harmonization is shown in the table below:JOB(06)/60Page 3HS-2 DESCRIPTIONCh. 50 SilkCh. 51 Wool, fine/coarse animal hair, horsehair yarn & fabricCh. 52 Cotton (Except 5201 and 5202)Ch. 53 Other vegetable textile fibres; paper yarn & woven fabricsCh. 54 Man-made filamentsCh. 55 Man-made staple fibresCh. 56 Wadding, felt & nonwoven; yarns; twine, cordage etc.Ch. 57 Carpets and other textile floor coveringsCh. 58 Special woven fabrics; tufted textile fabrics; lace; tapestries etc.Ch. 59 Impregnated, coated, cover/laminated textile fabric etc.Ch. 60 Knitted or crocheted fabricsCh. 61 Articles of apparel & clothing access, knitted or crochetedCh. 62 Articles of apparel & clothing access, not knitted/crochetedCh. 63 Other made-up textile articles; sets; worn clothing etc.15. Product coverage could further be discussed in line with the interests of participatingmembers.V. PARTICIPATION16. In order for this initiative to be beneficial for all developing countries all competitiveproducers must be included.VI. SPECIAL AND DIFFERENTIAL TREATMENT17. In scope of the initiative, in line with the July 2004 Framework; developing countries couldenjoy certain Special and Differential Treatment (S&D) provisions including longer implementationperiods for their tariff reductions.VII. CONCLUSION18. The needs of the textiles and clothing sectors, which are unique by nature, can only beaddressed through a comprehensive approach beyond a general formula. In this framework, theinitiative foreseeing a harmonization among the tariff rates of member states is believed to be the rightmethod.19. The initiative will not only harmonize tariff rates but also it will address trade-distortingmeasures and NTBs within the sector. As such, through the proposed initiative, it will be possible toreduce or eliminate tariff peaks, high tariffs and tariff escalations; to enhance market access amongdeveloping countries (South - South trade) and to provide a comprehensive analysis of the sectorsthrough the inclusion of trade-distorting practices and NTBs.__________
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