” India’s request for talks comes in a time when countries around the world face pressure to protect their exporters and domestic industries in response to global economic slowdown. It also illustrates how many developing countries are now in hot competition over textiles, traditionally a source of tension between rich and poor economies, with cheap imports from Asia threatening clothing factories in the United States and Europe..
“International trade rules allow a country hit by a surge in imports to raise tariffs temporarily from agreed levels to give its industry time to adjust. But they must consult with countries with a substantial interest as exporters, and try to maintain the equivalent amount of market access for them that applied before the safeguard, which can involve providing compensation..
“Turkey, a major producer of cotton, introduced the safeguard in summer 2008 after recording a huge surge in imports of cotton yarn from 2005 onwards. Cotton yarn imports rose 63.6 percent in 2005, 46.9 percent in 2006 and 119.7 percent in 2007, and in the first five months of 2008 were 32.1 percent higher than a year earlier, a document filed by Turkey at the WTO at the time showed..
“As a result, although total consumption of cotton yarn rose in the period, Turkish employment in the industry fell steadily and domestic production dropped in 2007, when the market share of imports increased to 12.5 percent from 2.8 percent in 2004..
“Turkey responded by setting a temporary tariff on cotton yarn imports for three years, amounting to 15-20 percent for the first 12 months, compared with the 5 percent ceiling it has agreed for the product at the WTO normally..
“While Turkey waived the safeguard tariff for many developing countries that are not significant suppliers of yarn, it did apply to India, one of its biggest sources. A similar move in January to raise tariffs by Egypt, another big textiles producer, which is India’s fifth biggest textile market, has also caused concern in India, Indian media said..
” .
Date:3/16/2009
Source: