China calls on World Bank to help small cotton producers hit by trade deal

GENEVA (AFP) - China called on the World Bank and the International Monetary Fund (IMF) to help small textile and clothing exporting countries that are threatened by the end of import quotas at the end of the year.
But the Asian giant insisted at a meeting at the World Trade Organisation in Geneva that caps on imports from individual countries imposed by the United States and European countries must end as scheduled on January 1, 2005.
Chinese and Indian producers stand to make huge gains in their share of exports to major markets once the phase-out agreed in WTO's Agreement on Textiles and Clothing more than nine years ago is completed, squeezing out smaller exporters, according to studies.
"Why should the multilateral trading system seek to turn back the hands of time?" China's ambassador to the WTO Sun Zhenyu remarked.
Sun said the 40-year-old reliance on quotas had disrupted the production and trade of textiles in developing countries which have a comparative advantage in the sector.
The IMF and the World Bank had shown they were ready to help poor countries "make adjustments so as to support trade liberalisation efforts in the WTO" he added.
"We call on those two institutions to significantly enhance their assistance programmes in order to better respond to the needs of the members," China's ambassador said.
About 20 small or poor textile producing nations, including Mexico, Mauritius and Tunisia, have urged the WTO to temper the impact of the binding agreement, which they fear will lead to massive job losses.
Seven of them on Friday asked the WTO's 140 other member states to approve a study on the consequences of the end of quotas and to include the issue in the organisation's work programme.
Mauritius ambassador Servan Singh told Friday's meeting of the WTO's council for trade in goods : "Some studies have suggested that the elimination of quotas and the further liberalisation of the sector may be beneficial to developing countries as a whole."
"But they also clearly indicate that there will be more losers along with the winners in the process," he added.
The United States and the European Union reiterated during the meeting that the quotas capping imports would be lifted as agreed from January.
"The US will continue to abide by all its ATC commitments," US delegate William Tigliani said.
The end of the 40-year-old quota regime, which limited imports into industrialised countries, was designed primarily to boost trade by poor countries that built up their industry around textiles.
China joined the agreement when it became a member of the WTO in 2002.
But the world's most populous nation and industrial powerhouse was not a part of the deal when it was negotiated in the 1990s.
Many of the countries that wanted quotas abolished are among those now protesting about the agreement's likely impact.