DECEMBER 22, 2005, BOSTON -- The National Textile Association greets with guarded optimism the Draft Ministerial Programme released December 18 in Hong Kong at the conclusion of the World Trade Organization Conference.

"As regards American textiles, the result is mixed," said NTA president Karl Spilhaus. "We were looking at three major areas of concern to NTA and the other textile industry representatives in Hong Kong and it appears we had some success in two out of three."

NTA had identified as a high priority the goal of obtaining a ministerial text that allows for textile and apparel to be treated as a sector apart from other non-agricultural trade. The general framework for liberalization of non-agricultural trade will likely result in developed countries, such as the U.S., undertaking substantial reductions in tariffs while developing countries make only slight reductions and continue to drag their feet on reduction in non-tariff barriers. A textile "sectoral" will recognize the important and unique issues in this sector and will be a possible vehicle for addressing true market access for U.S. textiles in other countries. A sectoral for textiles will be consistent with earlier world trade talks which treated textiles separately. "We are pleased," said Spilhaus, "that the text that came out of the conference recognizes that WTO members are pursuing sectoral initiatives. This gives us something to build on."

NTA also sought to limit the inclusion of textiles in the duty-free concession to least-developed countries (LDCs). The final text calls for the U.S. and other developed countries to provide duty-free access to all product from all LDCs. Some of these LDCs, such as Bangladesh and Cambodia have substantial textile industries and are hardly "least developed" in the apparel sector. Bangladesh shipped over $2 billion of textile and apparel to the U.S. in the period Jan.-Oct. 2005; Cambodia shipped $1.4 billion. "Under this arrangement, our CBTPA and CAFTA partners will find their duty-free status is much less of a benefit when they have to compete with Bangladesh and Cambodia who will also have duty-free status. Furthermore, this duty-free access is likely to be based on a very weak rule of origin that will allow Bangladesh and Cambodia to use Chinese fabric," said Spilhaus.

However, the LDC provision may give the U.S. some valuable flexibility. Three percent of products, by tariff line, may be excluded from the duty-free treatment. Exactly how that exclusion will be administered is unclear, but it appears that we may be able to exclude most of the most sensitive textile and apparel products, including those covered by the U.S.-China bilateral agreement that goes into effect on January 1st.

NTA's final goal for the WTO ministerial conference was harmonization of others countries' textile and apparel tariffs at the relatively low level of current U.S. tariffs. The ministers opted instead for tariff reductions under a "Swiss Formula" with potentially different coefficients for developed and developing countries. That means that the U.S., with low tariffs to begin with, will have to lower our tariffs to levels that afford little if any protection for our textile industry, while other countries would still retain relatively high tariffs. "The failures of our U.S. negotiators to obtain a commitment to proportional and reciprocal reductions places even more importance on our getting a textile sectoral in the Doha Round," said Spilhaus, who continued, "A textile sectoral offers the best likelihood of getting foreign market access for our American textiles. Our U.S. industry is modern, efficient, and innovative. Give us access to foreign markets and we can compete globally."

The National Textile Association is made up of companies that weave, knit, or finish fabrics in the U.S. and the fiber, yarn, and other suppliers to the U.S. textile industry.