GENEVA (AFP) - A movement to counter the abolition of textile and clothing import quotas at the end of the year is gaining momentum, driven by fears that an unbridled China could wipe out competition because of its sheer production capacity, diplomats said.
"The challenges are really enormous. There's a major question mark over what is going to happen in 2005," an African diplomat said ahead of a meeting of the World Trade Organisation's 143 member states on Friday to discuss the issue.
About 20 small or poor textile producing nations held a private meeting in Geneva at Mexico's initiative last week to set out common "possibilities of appeal", the diplomat said, amid fears of an avalanche of Chinese imports and massive job losses.
However, representatives of larger economies and trade officials this week warned that they could not reverse the agreement reached in 1995, which binds the WTO's members into the phase-out by January 1, 2005.
"Friday's meeting should set up a follow-up mechanism, a surveillance system," a European diplomat said.
"But it's clear that the WTO can't go further and quotas will disappear on January 1. There will be no extension," he added.
The end of the 40-year-old regime of quotas, which limited imports into industrialised countries, was designed primarily to boost trade by poor countries that built up their industry around textiles.
China was not part of the initial Agreement on Textiles and Clothing but automatically became a beneficiary when it joined the WTO two years ago.
Since then, fears have grown about the Asian giant's ability to take over the world's top clothing markets, fuelled by reports that Chinese textile companies planned to step up production next January.
China, excluding Hong Kong, became the world's largest textile exporter in 2003 with 19.7 percent of the market, just ahead of the European Union, United States and South Korea, following seven percent growth since 1995, WTO data showed.
It seized an even greater share of the finished clothing market in 2003, 28.1 percent against 19.3 percent eight years ago.
Opponents argue that they would have had a different outlook on the WTO agreement had they known that the world's biggest producer would be among those allowed unlimited trade.
"Small countries will face pretty huge competition," an official from a small textile-producing nation told AFP, complaining that the shift in the textile industry was already being felt.
"Merely in anticipation of January 1, we're already facing problems. Factories are being closed and people are being fired because orders are made in advance, and some companies have started to relocate to China," he said.
A WTO study released last month found that China and India were poised to at least triple their individual slices of the world's largest clothing market, the United States, once quotas are lifted.
It predicted that China's share of American clothing imports would skyrocket from 16 percent to 50 percent when quotas are eliminated, while India's share would surge from four percent to 15 percent.
The world's most populous nations would largely squeeze out smaller exporters like Bangladesh, Indonesia, the Philippines, Latin American economies and the EU, which currently have market shares in the single digits or low teens in the US.
The study forecast that the overall impact on raw textiles would be less extreme.
Low-cost producers like Mexico, Caribbean countries, eastern Europe and North Africa, which neighbour US and European consumer markets, were also well placed to take advantage of the fashion industry's growing demand for swift deliveries, it found.
Under the deal for China's accession to the WTO, a country may ask for special safeguards if there is "market disruption", obliging China to immediately cap the increase in its exports of the targeted textile product to 7.5 percent.
But the safeguard mechanism is temporary and will not be available after 2008.