Govt expects EU to scale up textile quota

“The EU cannot make a non-quota country as a quota country under the above agreement as it goes counter to the rules of the world trade body, officials assert. New Delhi can take recourse to the dispute settlement body to remedy the situation, but that will be time consuming, they point out. Under the agreement on textiles and clothing, the main quota countries are the United States and Canada, besides the EU.

Garment Exporters Association president H.K.L. Magu fears that unless the quota for 2004 is proportionately increased, there is bound to be a shortfall in exports of say garments to the Union, adding the new members have not been buying large quantities of textiles from us in the past. Quotas under the textiles and clothing agreement are due to be phased out by December 31, 2004 after a 10-year transition period. “I do not see any reason for making the new EU members share the quota and that too for eight months from May 1, 2004,” Magu further says.

D. K. Nair, WTO expert and the secretary-general of Indian Cotton Mills Federation, expects the Union to increase the quota for 2004. “The quota increase was conceded when Britain, Spain, Portugal, Austria and Finland were admitted to the EU in the past,” he said.

In fact, the quotas maintained by the EU under the above textiles and clothing agreement to deny market access are at the cost of European consumers and its local industry, says Textile Secretary S. B. Mohapatra, quoting a study conducted with Swedish assistance.

The study concludes that had the integration or removal of quotas been completed by December 31, 1997, seven years before the scheduled date of December 31, 2004, European consumers would have gained over 25 billion euros per annum.

Referring to the study, Mohapatra says the carrying cost of each job in the European textile sector and the clothing industry by delayed removal of quotas works out to be 28,000 euros and 41,000 euros annually, respectively.