the end of enchainment : will the removal of textile and clothing quotas bring us enchantment? world...
TRANSCRIPT
The End of Enchainment:Will the Removal of Textile and Clothing
Quotas Bring Us Enchantment?
World Bank Seminar25-26/04/05
Dr. Dean Spinanger
Kiel Institute for World [email protected]
I. Introduction and Overview
There are some WTO issues not clarified
.....why not???
Many countries are growing......
at a rate far above many other countries.
But in what areas???
......and how strong???
I. Introduction and Overview
But others threw themselves onto the mercy of free trade.
Unfortunately „free trade“ seems to be interpreted differently around the world.
Often „free trade“ is associated with unfair competition.
That, of course, is BS.....
Introduction and Overview
Free trade means letting in all goods into a country that are sold at a price which reflects production costs.
It does not mean not letting all those goods into a country that are very competitive.
Take a look at what some economies accomplished.
TOTAL EXPORTS BY COUNTRIES/REGIONS (bn $)
10
100
1000
10000
1990 2002 2008
EU CE AF LA US JP CN Rest
EU
Rest of World
US
ChinaAF
CE
LAJP
Log Scale
TOTAL IMPORTS BY COUNTRIES/REGIONS (bn $)
10
100
1000
10000
1990 2002 2008
EU CE AF LA US JP CN Rest
EU
Rest of WorldUS
ChinaAF
CE
LAJP
Log Scale
I. Introduction and Overview
But now with almost all countries in the WTO,
With quotas having been removed on T&C products..,
With other industries being more open.....
What might be happening as a result of all this????
II: WHAT MIGHT HAPPEN?
What does the future hold for all those countries after China‘s WTO accession?
I am not a charlatan...but an economist.
There are basic economic principles which tell us what might be..
And these basic economic principles are packed into a cutting edge model.
II: WHAT MIGHT HAPPEN?
The model is called GTAP5.......
General Trade Analysis Project version 5.
It‘s robust,
very realistic,
and adaptable to specific needs.
The GTAP5 Model
General equilibrium: multi-sector, with linkages through intermediate inputs and factor markets.
Calibrated : the model is “bench-marked” to baseline scenario in 1997.
Data: GTAP social accounting matrix data.
Policy data: include GTAP tariffs, final WTO accession tariffs for P. R. China & Chinese Taipei, service sector protection, newly calculated quota rents and imputed competitive advantage for China.
The Sectoral Breakdown (23)
Wool Leather Wh-ret-trade
Natural fibers Chem. ref. Transport.
Primary food Steel Commun.
Other primary NF-metals Const.
Sugar Motor veh. Fin-ins-rel.
Proc. food Electronics Consum. serv.
Textiles Other mach. Other serv.
Clothing Manuf. nes
The Regional Breakdown (25)
Hong Kong Other S. Asia Brazil
China, P. R. MERCOSUR
Chinese Taipei Australia Chile
New Zealand Other Lat. America
Japan
Korea Canada European Union
ASEAN5 United States Turkey
Vietnam
Mexico Africa+Mid-East
India CBI Rest of World
Bangladesh ATP
Percent Impact of ATC Phaseout and China’s Accession on Total Exports
-10 -5 0 5 10 15 20 25
Hong Kong
China (PRC)
Chinese Taipei
Japan
Korea
ASEAN5 c
Vietnam
India
Bangladesh Other South Asia
Australia
New Zealand
Canada
United States
Mexico
Brazil
MERCOSUR, other
European Union (15)
Turkey
Africa, Mid-East
Rest of World
TOTAL ATC
CHINA WTO
III: WHAT IS GOING ON?
But what does all this mean for T&C industries and for importers?
What options are open....and what other countries might serve as a base for production and/or sourcing?
Those who know best are in Hong Kong.
III. WHAT IS GOING ON?
There‘s a saying:
You have to know where you came from in order to know where you might be headed.
In other words:
What are the trends from the past telling us about where we are and might be heading?
WHERE HAVE WE COME FROM & WHITHER?
Trade Growth & Shares* 1965-2010 (%)
Total trade Textiles* Clothing*
1965-73 15.2 14.0 4.3* 20.4 1.4*
1973-80 19.4 13.7 4.0* 20.1 2.0*
1980-90 5.9 6.7 2.8* 10.2 3.1*
1990-95 8.3 7.4 3.0* 7.8 3.2*
1995-10 3.0 -2.2 2.9* 3.7 3.1*
2001-10 6.0 1.0 2.4* 6.0 3.2**Share in total trade in initial year
World Exports in Bill. US$: 1965 - 2003
0
50
100
150
200
250
1965 1970 1975 1980 1985 1990 1995 2000
0
1000
2000
3000
4000
5000
6000
7000
8000
Textile (SITC 65) Clothing (SITC 84) World Trade (right scale)
Bill. US$ Bill. US$
The ATC: Where Are We Now?
Liberalization was a FARCE
Final tranche 2004: only sensitive products
Faking liberalization + finagling protection
Of course, guidelines were not precise
Motto was: Mañana is better than now
ATC Liberalization 1995 - 2005
0
20
40
60
80
100
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
%
1994 1998 2002 2005
A trap set by past politicians (backloading)Q
uo
ta p
rote
ctio
n
100%
III. WHAT IS GOING ON?
TEXTILE EXPORTS TO WORLDEconomy 90* 90-94 94* 94-03 01*
China (3) 13.1 (2) 5.2 (1)
Germany (1) -2.6 (1) -1.9 (3)
USA (9) 7.0 (8) 6.9 (5)
India (14) 15.1 (12)
5.9 (10)
Turkey (18) 11.1 (15)
8.6 (13)
*Rank in given year. Bold numbers designate above average growth rates.
III. WHAT IS GOING ON?
CLOTHING EXPORTS TO WORLDEconomy 90* 90-94 94* 94-03 03*
China (2) 25.2 (1) 6.4 (1)
Hong Kong (3) 0.5 (3) -0.3 (3)
Mexico (32) 30.5 (21)
24.8 (4)
India (13) 9.8 (11)
7.3 (8)
Bangladesh (33) 25.6 (26)
19.6 (10)
*Rank in given year. Bold numbers designate above average growth rates.
III. WHAT IS GOING ON?
In the time period 90–03 Mexico was beaten by Bangladesh in increasing its share in global clothing market among the top 25 exporters.
But Vietnam came from nowhere to #15,while Mexico climbed just 30 places based on its preferential access to North American markets.
Ranking of Factors Influencing Investment Decisions: 2000
3
4
5
6
7
8
9
10
0 50 100
15
13
12
14
10
9
4
87
16
11
17
5
18
36
12
Rank
Coefficient of variation (%)
1 Politics and stability in host country 2 Availability of quotas in host country 3 Quality of transportation infrastructure in host country 4 Quality of telecom infrastructure in host country 5 Policies affecting international trade and investment 6 Labor costs 7 Education and training of workers 8 Policies affecting labor, health and environment 9 Potential for exports to USA
10 Lack of restrictions on capital/profit transactions 11 The "culture" of host country 12 Potential new customers/new markets 13 Potential for exports to EU 14 Host government tax policies/incentives 15 Availability of ready-made factory units 16 Potential for exports to region 17 HKG tax policies 18 Existence of Overseas Chinese Community
Ranking of Factors Influencing Investment Decisions: 2003
1 Labor costs 2 Policies affecting international trade and investment 3 Politics and stability in host country 4 Policies affecting labor, health and environment 5 Quality of transportation infrastructure in host country 6 Lack of restrictions on capital/profit transactions 7 Quality of telecom infrastructure in host country 8 Host government tax policies/incentives 9 Potential for exports to USA
10 The "culture" of host country 11 Education and training of workers 12 Potential new customers/new markets 13 Availability of quotas in host country 14 Potential for exports to EU 15 HKG tax policies 16 Availability of ready-made factory units 17 Potential for exports to region 18 Existence of Overseas Chinese Community
3
4
5
6
7
8
9
10
0 50 100
1513
121410
9
4
87
16
11
17
5
18
3
6
1
2
Rank
Coefficient of variation (%)
Average Ranking of Factors Influencing Investment Decisions from 01/2000 and 02/3003
1 Politics and stability in host country 3 Quality of transportation infrastructure in host country 5 Policies affecting international trade and investment 4 Quality of telecom infrastructure in host country 6 Labor costs 8 Policies affecting labor, health and environment 2 Availability of quotas in host country
10 Lack of restrictions on capital/profit transactions 7 Education and training of workers 9 Potential for exports to USA
11 The "culture" of host country 14 Host government tax policies/incentives 12 Potential new customers/new markets 13 Potential for exports to EU 15 Availability of ready-made factory units 17 HKG tax policies 16 Potential for exports to region 18 Existence of Overseas Chinese Community
3
4
5
6
7
8
9
10
0 20 40 60
15
121411
9
7
4 10
17
2
16
6
18
5
8
13
13
Rank
Coefficient of variation (%)
III. WHAT IS GOING ON?
These are THE 7 KEY FACTORS to get in shape:
1. Politics and stability;
3. Quality of transport infrastructure;
5. Policies affecting trade and investment;
4. Quality of telecom infrastructure;
6. Labor costs;
8 Policies re. labor, health & environment;
10.Lack of capital/profit transaction restrictions.
Transportation Infrastructure
Telecomm Infrastructure
s
Service Infrastructure
bh
Difficult to Understand Regulations - NTBs
s
III. WHAT IS GOING ON?
The message is clear:
Without coming up to the cut in these areas, T&C exporters will lose out in the battle for market shares now that quotas are eliminated.
And of course with China being a full-fledged member of the WTO since Doha, competition is all the greater.
WHAT‘S GOING ON OUT THERE???
Sweden's Clothing Imports from Selected Regions in Percent of Total Non-OECD Imports plus Portugal, Spain and Greece (1980-2001)
0
10
20
30
40
50
60
70
80 82 84 86 88 90 92 94 96 98 00
Quotas No Quotas Quotas
P,Sp,Gr
E-Asia
SE/Rest Asia
Euro-Med
Euro-East
%
Source: Own calculations based on Swedish import data. Moving 3-year-average.
Sweden's Clothing Imports from Selected Regions in Percent of Total Non-OECD Imports plus Portugal, Spain and Greece (1980-2001)
0
5
10
15
20
25
30
35
40
45
50
80 82 84 86 88 90 92 94 96 98 00
P,SP, GR
SE/Rest Asia
Euro-East
Euro-Med
E-Asia minus China
China
%
Source: Own calculations based on Swedish import data. Moving 3-year-average.
Clothing Imports of Sweden from China, 4 South Asian Countries and EURO-RIM in % of NON-OECD Clothing Imports, 1990-2001
0
5
10
15
20
25
30
35
40
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001
China
4 South Asian Countries
%
Euro-East
Euro-Med
Clothing (SITC 84) Imports of Major EU Countries and USA from Selected South Asian Countries in % of Non-OECD Imports,
1990–2003
0
5
10
15
20
25
30
35
40
1990 1992 1994 1996 1998 2000 2002
Source: OECD, ITCS (http://www.sourceoecd.org), own calculations.
0
5
10
15
20
25
30
35
40
1990 1992 1994 1996 1998 2000 2002
HKG + China
Sweden United Kingdom
Clothing (SITC 84) Imports of Major EU Countries and USA from Selected South Asian Countries in % of Non-OECD Imports,
1990–2003
0
5
10
15
20
1990 1992 1994 1996 1998 2000 2002
Source: OECD, ITCS (http://www.sourceoecd.org), own calculations.
0
5
10
15
20
1990 1992 1994 1996 1998 2000 2002
Germany France
Clothing (SITC 84) Imports of Major EU Countries and USA from Selected South Asian Countries in % of Non-OECD Imports,
1990–2003
0
5
10
15
20
25
1990 1992 1994 1996 1998 2000 2002
Source: OECD, ITCS (http://www.sourceoecd.org), own calculations.
0
5
10
15
20
25
1990 1992 1994 1996 1998 2000 2002
Italy Netherlands
Clothing (SITC 84) Imports of Major EU Countries and USA from Selected South Asian Countries in % of Non-OECD Imports,
1990–2003
0
5
10
15
20
25
1990 1992 1994 1996 1998 2000 2002
Source: OECD, ITCS (http://www.sourceoecd.org), own calculations.
United States Canada
0
5
10
15
20
25
30
35
40
1990 1992 1994 1996 1998 2000 2002
Clothing (SITC 84) Imports of Major EU Countries and USA from Selected South Asian Countries in % of Non-OECD Imports,
1990–2003
Source: OECD, ITCS (http://www.sourceoecd.org), own calculations.
Japan Australia + NewZealand *
* 2003 only Australia
0
10
20
30
40
50
60
70
80
90
100
1990 1992 1994 1996 1998 2000 2002
0
10
20
30
40
50
60
70
80
90
100
1990 1992 1994 1996 1998 2000 2002
US Textile (SITC 65) and Clothing (SITC 84) Imports from Africa and Latin America
Source: OECD, ITCS (http://www.sourceoecd.org), own calculations.
SITC 65
0
2
4
6
8
10
12
14
1991 1993 1995 1997 1999 2001 2003
%
0
2
4
6
8
10
12
1991 1993 1995 1997 1999 2001 2003
%
Africa Latin America Africa-Medrim South America Africa-NonMedrim Mexico Central Am. & Carib. excl. Mexico
US Textile (SITC 65) and Clothing (SITC 84) Imports from Africa and Latin America
Source: OECD, ITCS (http://www.sourceoecd.org), own calculations.
SITC 84
0
5
10
15
20
25
30
35
1991 1993 1995 1997 1999 2001 2003
%
0
2
4
6
8
10
12
14
16
18
1991 1993 1995 1997 1999 2001 2003
%
Africa Latin America Africa-Medrim South America Africa-NonMedrim Mexico Central Am. & Carib. excl. Mexico
Canadian Textile (SITC 65) and Clothing (SITC 84) Imports from Africa and Latin America
Source: OECD, ITCS (http://www.sourceoecd.org), own calculations.
SITC 65
0
1
2
3
4
5
1991 1993 1995 1997 1999 2001 2003
%
0
1
2
3
4
1991 1993 1995 1997 1999 2001 2003
%
Africa Latin America Africa-Medrim South America Africa-NonMedrim Mexico Central Am. & Carib. excl. Mexico
Canadian Textile(SITC 65) and Clothing (SITC 84) Imports from Africa and Latin America
Source: OECD, ITCS (http://www.sourceoecd.org), own calculations.
SITC 84
0
1
2
3
4
5
6
7
8
9
1991 1993 1995 1997 1999 2001 2003
%
0
1
2
3
4
5
6
1991 1993 1995 1997 1999 2001 2003
%
Africa Latin America Africa-Medrim South America Africa-NonMedrim Mexico Central Am. & Carib. excl. Mexico
EU* Textile (SITC 65) and Clothing (SITC 84) Imports from Africa and Latin America
Source: OECD, ITCS (http://www.sourceoecd.org), own calculations.
SITC 65
0,0
0,2
0,4
0,6
0,8
1,0
1,2
1,4
1,6
1,8
2,0
1991 1993 1995 1997 1999 2001 2003
%
0,0
0,2
0,4
0,6
0,8
1,0
1,2
1,4
1,6
1991 1993 1995 1997 1999 2001 2003
%
Africa Latin America Africa-Medrim South America Africa-NonMedrim Mexico Central Am. & Carib. excl. Mexico
* 2003 without Greece, Finland and Sweden
EU* Textile(SITC 65) and Clothing (SITC 84) Imports from Africa and Latin America
Source: OECD, ITCS (http://www.sourceoecd.org), own calculations.
SITC 84
0
1
2
3
4
5
6
7
8
9
10
1991 1993 1995 1997 1999 2001 2003
%
0
1
2
3
4
5
6
7
8
1991 1993 1995 1997 1999 2001 2003
%
Africa Latin America Africa-Medrim South America Africa-NonMedrim Mexico Central Am. & Carib. excl. Mexico
* 2003 without Greece, Finland and Sweden
Japanese Textile (SITC 65) and Clothing (SITC 84) Imports from Africa and Latin America
Source: OECD, ITCS (http://www.sourceoecd.org), own calculations.
0,0
0,2
0,4
0,6
0,8
1,0
1991 1993 1995 1997 1999 2001 2003
%
0,0
0,1
0,2
0,3
0,4
0,5
1991 1993 1995 1997 1999 2001 2003
%
SITC 65 SITC 84
Australian and New Zealand Textile (SITC 65) and Clothing (SITC 84) Imports from Africa and Latin America
Source: OECD, ITCS (http://www.sourceoecd.org), own calculations.
0,0
0,2
0,4
0,6
0,8
1,0
1,2
1,4
1,6
1,8
1991 1993 1995 1997 1999 2001 2003
%
0,0
0,1
0,2
0,3
0,4
0,5
1991 1993 1995 1997 1999 2001 2003
%
SITC 65 SITC 84
AND WHERE ARE THE DANGERS??
The dangers are clear:
When countries are too, too successful they get hit with NTBs.
This could mean, for instance, antidumping measures (ADMs) or other non-tariff measures (NTMs).
Remember the impct of the dumping measures portrayed earlier.
DANGERS ARE LURKING EVERYWHERE
8
9
10
11
12
13
14
15
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001
135
145
155
165
175
185
195
205
215
Aver. nr of ADMs/yrAverage
APECTariffRate
(% - left side)
% Tariff rates Nr. ADMs/yr l
TARIFFS DOWN, ADMS UP!!
The Future Is Uncertain
Of course the future is uncertain....but that is life.
However, the large economic model, set up to map future trade and growth after quota removal and China‘s WTO accession (Francois & Spinanger, 2001), shows that China, India, Taiwan, Hong Kong and Vietnam would gain most (%).
But the above 7 factors have to be taken into account here when viewing the results!!!!!
The Future Is Less Uncertain
If the affected economies were to change their policies and rid themselves of outdated baggage, they could perform much better.
Carpe diem, as the Romans said...it is not too late.
ADMs by Initiators and Afflicted: 1/95-12/02
Economy Initiations Afflicted
T&C Total T&C Total
Total 142 2160 142 2160
IEs 45 860 19 610
DEs 97 1300 123 1550
E. EUR 16 68 13 328
L. Amer 23 428 9 173
S. Asia 42 357 19 100
E/SE A. 8 198 75 853
Anti-Dumping Measures (ADMs) Initiated by ICS and DCs: 1985/86 – 2001/02
0
50
100
150
200
250
300
350
85-86
86-87
87-88
88-89
89-90
90-91
91-92
92-93
93-94
94-95
95-96
96-97
97-98
98-99
99-00
00-01
01-02
ADMs/yr
ICs Total
DCc Total
All Economies
Who Hit Whom??
0
20
40
60
80
100
120
140
85-86
86-87
87-88
88-89
89-90
90-91
91-92
92-93
93-94
94-95
95-96
96-97
97-98
98-99
99-00
00-01
01-02
ADMs/yr
ICs against ICs
ICs against DCs
DCs against ICs
DCs against DCs
EU‘s Anti-dumping Measures by Countries/Regions 85-03
Country/
Region
85-90 90-94 94-99 99-03 Total
E. Europe 40 14 23 13 90
CIS 0 20 18 17 55
PRC 0 19 21 20 60
E.Asia-PRC 28 15 20 16 79
SE Asia 1 18 28 13 60
S+W Asia 2 8 21 14 45
Other 43 24 33 23 123
Total 114 118 164 116 512
Source: Own calculations based on GATT/WTO documents.
Ratio of Measures (M) to Initiations (I)
In the following diagrams the ratio of measures enacted to initiations announced over the period 95 – 02 is shown in the caption.
The yearly values of measures enacted has been lagged by one period.
And Which Sectors Were Affected?
Base metals (XV) and chemical products (VI) were by far the most affected areas.
T&C products (XI) were hit by a relatively small number of ADMs, similar to machinery (XVI) but less than plastics (VII).
Other sectors hit were stone, glass/glassware etc (XIII) and agricultural products (I – IV).
However, the ratio of applied measures to initiated proceedings (M/I) was by far the highest for T&C products (72%) showing that economies were more serious about trying to protect the sector.
AD Initiations: By Sector - 01/01/95 to 31/12/02
0
20
40
60
80
100
120
140
160
1995 1996 1997 1998 1999 2000 2001 2002
VI
VII
XI
XV
AD Initiations: By Sector - 01/01/95 to 31/12/02
0
10
20
30
40
50
60
70
1995 1996 1997 1998 1999 2000 2001 2002
I - IV
XIII
XVI
Rest
Ratio of Measures (M) to Initiations (I)
In the following diagrams the ratio of measures enacted to initiations announced over the period 95 – 02 is shown in the caption.
The yearly values of measures enacted has been lagged by one period.
0
2
4
6
8
10
12
14
1994 1995 1996 1997 1998 1999 2000 2001 2002
Initiations Measures
XIII Products of Stone, Glass, etc: M/I = 41%
VII - Plastics and Rubber: M/I = 50%
0
10
20
30
40
50
60
1994 1995 1996 1997 1998 1999 2000 2001 2002
Initiations Measures
I – IV Agricultural Products: M/I = 51%
0
2
4
6
8
10
12
14
16
18
20
1994 1995 1996 1997 1998 1999 2000 2001 2002
Initiations Measures
VI - Chemical & Allied Industries: M/I = 55%
0
10
20
30
40
50
60
70
80
90
100
1994 1995 1996 1997 1998 1999 2000 2001 2002
Initiations Measures
XVI – Machinery: M/I = 55%
0
5
10
15
20
25
30
35
40
1994 1995 1996 1997 1998 1999 2000 2001 2002
Initiations Measures
Rest: M/I = 58%
0
10
20
30
40
50
60
70
1994 1995 1996 1997 1998 1999 2000 2001 2002
Initiations Measures
XV - Base Metals: M/I = 67%
0
20
40
60
80
100
120
140
160
1994 1995 1996 1997 1998 1999 2000 2001 2002
Initiations Measures
XI - Textiles and Clothing: M/I = 72%
0
5
10
15
20
25
30
35
40
1994 1995 1996 1997 1998 1999 2000 2001 2002
Initiations Measures
Anti-Dumping vs. Competition Laws
Objective:
Basic: Protects Protects (domestic) competition competitors
Actual: Protects Generally domestic no distinction from foreign between domestic & competitors foreign competition
Anti-Dumping vs. Competition Laws
Initiation:
Actions can only be In addition
initiated by executive private litigants
branch and the can initiate
relevant industry proceedings.
Anti-Dumping vs. Competition Laws
Administration:
Partly/mostly through Subject to full
executive branch/ supervision
commerce or foreign by courts.
trade ministry; appeals
through courts.
Anti-Dumping vs. Competition Laws
Standards:
InjuryRequires only Requires „directshowing that unfair causation“ andpractice „contributed“ showing of to material injury reasonable restraintabove so-called of trade orminimum injury substantiallevel (i.e. de minimus) lessening of
competition
Anti-Dumping vs. Competition Laws
Standards:
PricingRequires no Requires showing evidence predatory intent on intent. re. pricing aimed at
competitors.Does not require Requires showingshowing of selling below-cost pricingbelow cost. and capability of
recoupment.
What Can Be Done????
Boils down to 2 key questions:
DOES PROCESS PRODUCE ALLEGED EVIDENCE??
DOES EVIDENCE PROVE CRIME WAS COMMITTED??
Problem Areas
Determination of dumping (Art. 2)
Determination of injury (Art.3)
Investigation procedures (Art.5 & 6)
Price undertakings (Art. 8)
Imposition/Collection of duties (Art. 9)
Review (Art.11)
Dispute settlement (Art.17)
Conclusions
ADMs are going to increase all the more as liberalization opens up markets.
The DOHA ROUND must do something.
But even if...other NTMS are lurking.
Competition policy is a true alternative, but stands little chance of approval.
Ergo AD rules have to be tightened!!!!!
May the Future Be Brighter...
For sure the ATC must rest in peace after 2004...even if NMS countries have to struggle all the more with restructuring.
All calculations show that - aside from agriculture – the most welfare gains can be made by burying the quotas ASAP.
But what do policymakers/businessmen think about the future of T&C trade?
BIG EU CONFERENCE IN MAY, 2003, ADDRESSED THE ISSUES........
Scope and Thrust of EU ATC Conference
Attended by over 800 participants from 70 countries.
65 speakers from governments, international organizations, industry, unions and academia.
Addressed key challenges facing T&C sectors in post ATC period
Scope and Thrust
Dealt with impact of quota elimination and DDA on ICs, DCs and LDCs.
Looked at implications within RTAs
Discussed promotion of sustainable development and „ethical“ trade.
Debated overall trading rules and their effectiveness.
Specifics: Lamy
Commissioner Lamy said quotas will definitely fall as of 31/12/05.
He didn‘t say that just 15% of the quotas have been removed by the ICs.
Feared that quota elimination might give way to other forms of protection.
Specifics: Supachai
Director General of WTO pointed to the over 80% of the quotas remaining and feared contingent protection.
Between USA, EU and Canada over 1100 quotas will have to be eliminated.
Suggested possible earlier „voluntary liberalization“ to ease logjam as of 31/12/04.
Specifics: Ricupero
Secretary General spoke at length about the benefits of trade liberalization and of missed opportunities in case of T&C products.
He pointed to what the benefits would be for the EU without the quotas, namely €250/year for 4 person household, more with younger kids.
Invited WTO members to find a compromise between competitiveness and solidarity with the weak in which GSP principle would apply.
Specifics: General
Reciprocity issues were emphasized by the EU and US...no favors in advance.
US, EU and Japan can‘t go on providing over 75% of T&C trading opportunities – India, China, Pakistan, Brazil et al must open up.
AD/CV seen by EURATEX & US as ligit to counter NTBs in countries like India and China, whereby China was accused of currency dumping 40%.
Specifics: General
China was seen by many as a problem, coz they are taking too large shares of market.
Developing countries revealed their fears here too, worried also about losing their „quota protected“ market shares.
Developing countries worried about lower tariff rates as a result of liberalization coz it decreases the preferences they receive by the ICs.
Specifics:Final
Reps from Carrefor, Levi Strauss, C&A and Marks and Spencers laid down their successful strategies in taking ethical dimensions into consideration.
All in all it revealed the deep-seated worries of many DCs about how the system will be working against them.
IC reps continued to point out that „All players must abide by the rules.“
AMEN..but what about ADMS and NTBS?
ADMs by Initiators and Afflicted: 1/95-12/02
Economy Initiations Afflicted
T&C Total T&C Total
Total 142 2160 142 2160
IEs 45 860 19 610
DEs 97 1300 123 1550
E. EUR 16 68 13 328
L. Amer 23 428 9 173
S. Asia 42 357 19 100
E/SE A. 8 198 75 853
Anti-Dumping Measures (ADMs) Initiated by ICS and DCs: 1985/86 – 2001/02
0
50
100
150
200
250
300
350
85-86
86-87
87-88
88-89
89-90
90-91
91-92
92-93
93-94
94-95
95-96
96-97
97-98
98-99
99-00
00-01
01-02
ADMs/yr
ICs Total
DCc Total
All Economies
Who Hit Whom??
0
20
40
60
80
100
120
140
85-86
86-87
87-88
88-89
89-90
90-91
91-92
92-93
93-94
94-95
95-96
96-97
97-98
98-99
99-00
00-01
01-02
ADMs/yr
ICs against ICs
ICs against DCs
DCs against ICs
DCs against DCs
EU‘s Anti-dumping Measures by Countries/Regions 85-03
Country/
Region
85-90 90-94 94-99 99-03 Total
E. Europe 40 14 23 13 90
CIS 0 20 18 17 55
PRC 0 19 21 20 60
E.Asia-PRC 28 15 20 16 79
SE Asia 1 18 28 13 60
S+W Asia 2 8 21 14 45
Other 43 24 33 23 123
Total 114 118 164 116 512
Source: Own calculations based on GATT/WTO documents.
Ratio of Measures (M) to Initiations (I)
In the following diagrams the ratio of measures enacted to initiations announced over the period 95 – 02 is shown in the caption.
The yearly values of measures enacted has been lagged by one period.
And Which Sectors Were Affected?
Base metals (XV) and chemical products (VI) were by far the most affected areas.
T&C products (XI) were hit by a relatively small number of ADMs, similar to machinery (XVI) but less than plastics (VII).
Other sectors hit were stone, glass/glassware etc (XIII) and agricultural products (I – IV).
However, the ratio of applied measures to initiated proceedings (M/I) was by far the highest for T&C products (72%) showing that economies were more serious about trying to protect the sector.
AD Initiations: By Sector - 01/01/95 to 31/12/02
0
20
40
60
80
100
120
140
160
1995 1996 1997 1998 1999 2000 2001 2002
VI
VII
XI
XV
AD Initiations: By Sector - 01/01/95 to 31/12/02
0
10
20
30
40
50
60
70
1995 1996 1997 1998 1999 2000 2001 2002
I - IV
XIII
XVI
Rest
Ratio of Measures (M) to Initiations (I)
In the following diagrams the ratio of measures enacted to initiations announced over the period 95 – 02 is shown in the caption.
The yearly values of measures enacted has been lagged by one period.
0
2
4
6
8
10
12
14
1994 1995 1996 1997 1998 1999 2000 2001 2002
Initiations Measures
XIII Products of Stone, Glass, etc: M/I = 41%
VII - Plastics and Rubber: M/I = 50%
0
10
20
30
40
50
60
1994 1995 1996 1997 1998 1999 2000 2001 2002
Initiations Measures
I – IV Agricultural Products: M/I = 51%
0
2
4
6
8
10
12
14
16
18
20
1994 1995 1996 1997 1998 1999 2000 2001 2002
Initiations Measures
VI - Chemical & Allied Industries: M/I = 55%
0
10
20
30
40
50
60
70
80
90
100
1994 1995 1996 1997 1998 1999 2000 2001 2002
Initiations Measures
XVI – Machinery: M/I = 55%
0
5
10
15
20
25
30
35
40
1994 1995 1996 1997 1998 1999 2000 2001 2002
Initiations Measures
Rest: M/I = 58%
0
10
20
30
40
50
60
70
1994 1995 1996 1997 1998 1999 2000 2001 2002
Initiations Measures
XV - Base Metals: M/I = 67%
0
20
40
60
80
100
120
140
160
1994 1995 1996 1997 1998 1999 2000 2001 2002
Initiations Measures
XI - Textiles and Clothing: M/I = 72%
0
5
10
15
20
25
30
35
40
1994 1995 1996 1997 1998 1999 2000 2001 2002
Initiations Measures
Anti-Dumping vs. Competition Laws
Objective:
Basic: Protects Protects (domestic) competition competitors
Actual: Protects Generally domestic no distinction from foreign between domestic & competitors foreign competition
Anti-Dumping vs. Competition Laws
Initiation:
Actions can only be In addition
initiated by executive private litigants
branch and the can initiate
relevant industry proceedings.
Anti-Dumping vs. Competition Laws
Administration:
Partly/mostly through Subject to full
executive branch/ supervision
commerce or foreign by courts.
trade ministry; appeals
through courts.
Anti-Dumping vs. Competition Laws
Standards:
InjuryRequires only Requires „directshowing that unfair causation“ andpractice „contributed“ showing of to material injury reasonable restraintabove so-called of trade orminimum injury substantiallevel (i.e. de minimus) lessening of
competition
Anti-Dumping vs. Competition Laws
Standards:
PricingRequires no Requires showing evidence predatory intent on intent. re. pricing aimed at
competitors.Does not require Requires showingshowing of selling below-cost pricingbelow cost. and capability of
recoupment.
What Can Be Done????
Boils down to 2 key questions:
DOES PROCESS PRODUCE ALLEGED EVIDENCE??
DOES EVIDENCE PROVE CRIME WAS COMMITTED??
Problem Areas
Determination of dumping (Art. 2)
Determination of injury (Art.3)
Investigation procedures (Art.5 & 6)
Price undertakings (Art. 8)
Imposition/Collection of duties (Art. 9)
Review (Art.11)
Dispute settlement (Art.17)
Conclusions
ADMs are going to increase all the more as liberalization opens up markets.
The DOHA ROUND must do something.
But even if...other NTMS are lurking.
Competition policy is a true alternative, but stands little chance of approval.
Ergo AD rules have to be tightened!!!!!
Summary and Conclusions
Given structure of the ATC a real danger exists that other forms of protectionism will take over after quotas are lifted as of 1/1/05.
This could particularly hit China which is expected to attract much more T&C activities due to competitive advantages beyond what relative prices might predict. Already machinery for T&C sector in China is pouring in.
Textile & Clothing Machinery Exports to Major Regions / Countries 1990 - 2003 – 3 Year Moving Average (US$ Mill.)
0
1000
2000
3000
4000
5000
6000
1990 1992 1994 1996 1998 2000 2002 European Union E-Europe + Turkey Africa China Rest Asia Cent.& South America Mexico Rest of World
Concluding Remarks
Will China continue to dominate?
Can NTBs be avoided given current trends?
What role will the time factor (i.e. nearness to market for JIT production) play?
Are there other factors?
What‘s the bottom line?
I Tried to Focus on the Essence...I Hope I succeeded