Order Code RL31723
Report for Congress
Received through the CRS Web
Textile and Apparel
Trade Issues
January 30, 2003
Bernard A. Gelb
Specialist in Industry Economics
Resources, Science, and Industry Division
Congressional Research Service ˜ The Library of Congress

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Textile and Apparel Trade Issues
Summary
Because of their importance to the U.S. economy and to many U.S. trade
partners, textile and apparel trade has been a major issue in trade relations with a
number of countries and regions. In the last several decades, textile and apparel
manufacture has been shifting to developing countries, with textiles and apparel
accounting for large portions of their exports to developed economies. Lower wages
in developing countries together with the labor-intensiveness of apparel production
tend to give developing countries a cost advantage in apparel manufacture and a
locational advantage for their textile production. Employment in these industries in
the United States and most other developed countries has been decreasing.
Textile and apparel production and international trade have been important
elements of economic activity and growth since the Industrial Revolution. Major
reasons are (1) textiles and apparel are basic items of consumption in all countries,
and (2) textile and apparel manufacture – particularly apparel – is labor-intensive,
requiring relatively little fixed capital for entrepreneurs to establish production
facilities. Thus, these industries are major generators of jobs.
In attempts to resolve conflicts between the interests of exporters and importers,
a number of agreements (multilateral and bilateral) were signed over the years
generally restricting the quantities of textiles and apparel traded. The international
Agreement on Textiles and Clothing is a transitional instrument that provides for the
phasing out of existing quotas by January 1, 2005 and places trade in textiles and
apparel under the rules governing other products. Developing countries, whose
exports have been limited, believe that developed countries have unfairly delayed
import liberalization, and continue to press for accelerated implementation of the
quota phase-out.
In moves to boost economic growth in poorer regions, Congress has eased trade
terms on textiles and apparel from Andean, Caribbean, and sub-Saharan nations. In
addition, the United States has concluded free trade agreements with several
countries that probably will have negative consequences for U.S. textile and apparel
producers. The extent of these trade benefits, however, is constrained by concerns
that growth of textile and apparel production in the above regions has caused and
could cause further difficulty for segments of the U.S. textile and apparel industries.
In early December 2002, the U.S. Trade Representative proposed to the WTO
that all tariffs on non-agricultural goods (including textiles and apparel) be
eliminated by 2015 – through a phase out procedure. The reactions by most countries
to the proposal have not been enthusiastic so far. Also, U.S. textile manufacturers
have objected, and it may be difficult for the U.S. government to sustain this proposal
against the wishes of U.S. textile and apparel producers.
This report will be updated as events warrant.

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Contents
The Economics of Textile and Apparel
Production and Trade . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
U.S. Textile and Apparel Production and Trade . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Textile and Apparel Trade Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Agreement on Textiles and Clothing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Dispute Settlement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Developing Countries’ Push for Accelerated Quota Phaseout . . . . . . . 4
U.S. Bilateral Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
China . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Two Other Recent Trade Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Congressional Initiatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Sub-Saharan Africa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
The Caribbean and Central America . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Andean Countries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Industry Concerns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
U.S. “Tariff-Free” Proposal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
List of Tables
Table 1. U.S. Trade in Textiles and Apparel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

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Textile and Apparel Trade Issues
Because of their importance to the U.S. economy and to many U.S. trade
partners, textile and apparel trade has been a major issue in trade relations with a
number of countries and regions. This report discusses and analyzes the reasons for
the importance of textile and apparel production to U.S. trading partners and to the
United States; and the report presents, discusses, and analyzes international and
domestic measures that have been undertaken to resolve conflicts between the
interests of exporters and importers. The report also presents and discusses measures
that the United States has undertaken to boost economic growth in poorer regions by
easing trade terms – particularly with respect to textiles and apparel. This report will
be updated as events warrant.1
The Economics of Textile and Apparel
Production and Trade
Textile and apparel manufacture, and international trade in those products, have
been important elements of economic activity and growth since the Industrial
Revolution. Major reasons for this are (1) textiles and apparel are basic items of
consumption in all countries, and (2) textile and apparel manufacture – particularly
apparel – is labor-intensive, requiring relatively little fixed capital for entrepreneurs
to establish production facilities. Thus, these industries are major generators of
employment. Modest capital requirements contributed to textiles and apparel being
among the major industries at the start of the Industrial Revolution and being
important to developing countries now. The percentage of total manufacturing value
added accounted for by textile and apparel production among developing countries
was triple the percentage among industrialized countries in 2000.2
Lower wage rates in developing countries together with the labor-intensiveness
of apparel manufacture tend to give developing countries a comparative advantage
in apparel manufacture and a locational advantage for textile manufacture. Thus,
textile and apparel manufacture is tending to shift to developing countries, with
textiles and apparel constituting large portions of their exports. Textile and apparel
manufacture (measured by constant-dollar value added) in industrialized countries
decreased between 1980 and 2000, whereas textile and apparel manufacture in
1 CRS analyses of a wide variety of trade issues, and references to CRS reports on those
issues, can be found in the CRS electronic briefing book on trade. Some of those reports are
cited herein. See [http://www.congress.gov/brbk/html/ebtra1.html.]
2 United Nations, Industrial Development Organization. International Yearbook of
Industrial Statistics 2002. Vienna: 2002. p. 55.

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CRS-2
developing countries increased.3 Between 1980 and 1999, textile and apparel exports
of developing economies (in nominal dollars) sextupled while developed economies’
textile and apparel exports rose 125%. Textiles and apparel comprised 13% of
developing economies’ exports in 1999, versus 4% for developed economies.4
U.S. Textile and Apparel Production and Trade
U.S. production of textiles and of apparel rose modestly between 1980 and
2000, in contrast to declining production in industrialized countries as a whole. Total
U.S. manufacturing output, however, doubled between 1980 and 2000.5 U.S. output
of both textiles and apparel fell in 2001, reflecting the economic recession. More
significant to many in the U.S. textile and apparel industries, employment in those
industries fell by 44% and 55%, respectively, between 1980 and 2001. Nevertheless,
the two industries together employed over one million people in the United States in
2001, or 6% of total manufacturing employment.
Some of the decline in U.S. textile and apparel employment is linked to gains
in productivity, and some to increases in importation of textiles and apparel. Textile
manufacturing output per hour rose 3.8% per year on average between 1980 and
2000; the corresponding figure for apparel was 3.9%. U.S. imports of textiles in
2002 (in current dollars) ran more than three times their 1980 level; and 2002 apparel
and textile product imports were more than ten times their 1980 level (see table).
Imports of all textiles and apparel exceeded exports by an estimated $62 billion in
2002. U.S. textiles have fared less badly with respect to trade than apparel and other
fabricated textile products. Textile production is less labor-intensive, more easily
automated, and, as a major input to apparel, can be exported to serve as inputs to
foreign-made apparel that then is exported to the United States. This attribute comes
into play in Congressional initiatives to stimulate the economies of countries in
poorer regions of the world, as described in a subsequent part of this report.
The considerable extent of U.S. textile and apparel trade with developing
countries is indicated by the following: For U.S. exports, 5 of the top 15 textile
destinations and 8 of the top 15 apparel destinations in 2001 were developing
countries. For U.S. imports, 4 of the top 15 textile sources and 8 of the top 15
apparel sources were developing countries in 2001. Mexico was among all four top-
five groups; and China was fifth as a textile exporter and first as an apparel exporter
to the United States.6
3 United Nations. op. cit. p. 58-59.
4 United Nations. 1994 International Trade Statistics Yearbook, Vol. II. New York: 1995.
p. S-20, 76, 92; 1999 International Trade Statistics Yearbook, Vol. II. New York: 2000. p.
S-42, 98, 114.
5 These output changes are based upon industrial production indexes, which are designed
to reflect changes in production volumes, rather than in value added (used by the United
Nations).
6 The trade information is based upon data from the Dataweb database compiled by the U.S.
International Trade Commission from U.S. Departments of Commerce and Treasury data.

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Table 1. U.S. Trade in Textiles and Apparel
(millions of current dollars)
Apparel & Other Fabricated
Fibers and Fabrics
Textile Products
Year
Exports
Imports
Balance
Exports Imports
Balance
1973
926
1,423
- 497
381
2,261
-1,880
1980
2,488
2,034
454
1,604
6,543
-4,939
1989
2,900
4,786
-1,886
2,451
25,509
-23,058
1994
5,270
6,534
-1,264
6,350
38,561
-32,211
1999
6,055
6,443
-388
10,404
61,454
-51,050
2000
7,284
7,042
242
10,891
70,275
-59,384
2001
7,365
6,336
1,029
9,039
70,010
-60,971
20021
7,774
6,797
977
8,149
71,323
-63,174
Note: Data for “Fibers and Fabrics” for years prior to 1999 include some fabricated textile
products, which now are included in “Apparel and Other Fabricated Textile Products.”
1 11 months data at annual rate.
Sources: U.S. International Trade Commission Dataweb (compiled from Departments of
Commerce and Treasury data).
Textile and Apparel Trade Agreements
Because of their importance to the U.S. economy and to many trade partners of
the United States, textiles and apparel have been major issues in U.S. trade relations
with a number of countries and regions. Attempts to resolve the conflicts between
the interests of exporters and importers have resulted in a number of agreements –
bilateral and multilateral – bearing on, and generally restricting textile and apparel
trade. As described below, such restrictions are being phased out under an
international agreement.
Agreement on Textiles and Clothing
The Agreement on Textiles and Clothing (ATC), currently in force, is a WTO
adaptation of the Multifiber Arrangement (MFA), which came into being in 1974.
The MFA was a set of rules governing bilaterally-negotiated agreements, mainly
between developing and developed countries, that applied quantitative restrictions
when surges of imports of particular products caused, or threatened to cause, damage
to the industry of the importing country.7
7 The MFA departed from the basic rules of the General Agreement on Tariffs and Trade
(as does the ATC), particularly with respect to the principle of non-discrimination.

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The ATC, which replaced the MFA on January 1, 1995, is a transitional
instrument that phases out existing quotas, improves access to the textile markets of
developing countries, and places trade in textiles and apparel under the rules
governing other products. The ATC provides for a 10-year transition period for
producers in developed countries to plan for and adjust to prospective intensified
competition from developing countries. All quotas on textile and apparel imports are
to cease on January 1, 2005. A notable feature of the ATC is a provision allowing
importing countries to impose transitional safeguard mechanisms to protect against
damaging surges of imports of products not under quota and not yet integrated under
WTO rules. In a four-step process of liberalization, importing countries can choose
how much of each product category to liberalize at which step, and can defer
liberalization of the most "sensitive" products until the last step.8 Many exporting
countries see this procedure as unfair and a constraint on their economic growth, and
want a faster phase-out of quotas.
Dispute Settlement. Disputes arising under WTO agreements may be
resolved under the WTO Dispute Settlement Understanding (DSU). Under the DSU,
panels are established to investigate complaints and make findings. The DSU
strengthens earlier dispute resolution procedures and practice (established under the
General Agreement on Tariffs and Trade). There have been about one dozen
complaints concerning textiles and/or apparel formally brought against or brought by
the United States; nearly all cases have been resolved through pre-adjudication
agreement, compliance with the recommendation of the Dispute Settlement Body,
or settlement after the DSU recommendation. A number of other disputes have been
settled by bilateral negotiation.9
Developing Countries’ Push for Accelerated Quota Phaseout. As
indicated above, developing countries, whose exports of textiles and apparel have
been limited by past agreements, believe that developed countries have unfairly
deferred substantial liberalization of imports, and are eager for acceleration of the
benefits of existing agreements. Before and during the WTO Seattle Ministerial
Meeting (November 30 to December 3, 1999), much of the negotiations related to
textiles and apparel pertained to this issue. The developing countries received some
support from the European Union and Japan for acceleration of implementation of
existing agreements.
Notwithstanding the failure of the Seattle Ministerial and the extended period
before the current general round of trade talks, known as the Doha Round, phase-out
of the ATC textile and apparel import restrictions proceeded; and developing
countries continued to press for accelerated implementation of the ATC. Those
8 See CRS Report RS20889, Textile and Apparel Quota Phaseout: Some Economic
Implications, by Bernard A. Gelb. A description of the provisions of the ATC can be found
on the WTO web site: [http://www.wto.org]. Click on “Trade Topics” and then “Textiles.”
9 For discussion of the DSU, see CRS Report RS20088, Dispute Settlement in the World
Trade Organization: An Overview, by Jeanne J. Grimmett, or the Dispute Settlement page
of CRS’ electronic briefing book on trade on CRS’ web site. Also, the dispute settlement
page of the WTO web site [http://www.wto.org] has extensive information on the dispute
settlement process and the status and disposition of complaints. Click on “Disputes.”

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CRS-5
countries won modest gains at the Doha Ministerial (November 10-14, 2001). The
Ministerial’s final declaration included agreement to negotiations aimed at (a)
reducing or eliminating tariffs, particularly regarding products of export interest to
developing countries, without any prior exclusions, and (b) reducing or eliminating
non-tariff barriers. In this provision and others, the special needs and interests of
developing and least developed countries are to be taken into account.
U.S. Bilateral Agreements
The United States has entered into several bilateral trade agreements in recent
years with both large and small countries. That with China probably is most
important; those with Vietnam and Singapore are illustrative of others.
China. The United States and China reached an agreement covering a wide
range of bilateral trade issues on November 15, 1999. The agreement incorporated
the 1997 textile and apparel agreement between the two countries. Apparel is one
of the largest categories of exports by China to the United States. Major elements of
the 1999 agreement were (a) China, upon accession to the WTO, will "catch up" to
the ATC schedule of quota phaseouts by 2005 for other WTO members, but the
United States retains the right to impose safeguard measures through the end of 2008,
allowing continuation of some quotas under some conditions, and (b) China will
significantly lower its tariffs on a wide range of textile and apparel products, and not
impose new nontariff barriers.10
U.S. textile and apparel importers praised the agreement, particularly regarding
the ending of quotas. U.S. textile manufacturers were disappointed that the agreement
did not provide for continuation of quotas on Chinese textiles and apparel for 10
years, a phase-out duration faced by other WTO members; and the industry trade
group expressed concern over expectations of U.S. job and production losses. U.S.
labor, as represented by the AFL-CIO, criticized the agreement as failing to protect
workers' and human rights.
To ensure that the WTO agreements would fully apply between the United
States and China (once China joined the WTO), P.L. 106-286 was enacted (October
10, 2000) creating mechanisms to monitor China’s compliance with WTO and other
trade agreements, and authorizing the President to grant China permanent normal
trade relations (PNTR) status after it joined the WTO. China officially joined the
WTO on December 11, 2001, and the President extended PNTR status to China on
December 27, 2001.
P.L. 106-286 also requires the U.S. Trade Representative (USTR) to annually
issue a report assessing China's compliance with its WTO trade obligations. In
December 2002, the USTR issued its first annual China WTO compliance report,
10 This agreement served as a necessary step toward China’s accession to the WTO. For
more on U.S.-China trade relations in general and textile and apparel trade in particular, see
CRS Issue Brief IB91121, China-U.S. Trade Issues, by Wayne M. Morrison.

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CRS-6
finding that, China had made significant progress in meeting its WTO obligations,
but also that a number of major problems remained.11
Two Other Recent Trade Agreements. Recent bilateral trade agreements
with Vietnam and Singapore also have ramifications for textiles and apparel. The
July 2000 agreement with Vietnam was followed up in December 2001 with the
granting by the United States of permanent normal trade relations status to Vietnam.
Such status significantly reduced U.S. tariffs on most imports from Vietnam and has
led to a very large increase in Vietnamese exports of textiles and apparel to the
United States. In the first 11 months of 2002, imports of textiles and apparel from
Vietnam were 17 to 18 times their level in the similar period of 2001. Before the
actual increase, expectations of such gains prompted debate, and calls by the U.S.
textile and apparel industries to negotiate a textile agreement that would place quotas
on Vietnamese textile and apparel imports. The United States hopes to begin formal
talks on a textile agreement with Vietnam in February 2003.
The December 2002 trade agreement with Singapore, covering a broad range of
goods and services and of types of market access, contains specific rules of origin
regarding textiles and apparel. Singaporean exports of textiles and apparel to the
United States will be duty free if made from yarn or materials further along the
production chain that originate in the United States or Singapore. However, a limited
amount of apparel exports from Singapore will be exempt from this rule for eight
years; and tariffs on such exports will be phased out over five years. The United
States commits to more liberal rules of origin once further liberalization of such rules
is achieved in the WTO. With the large jump in 2002 in imports from Vietnam, total
imports of textiles and apparel from Singapore and Vietnam represent about 1¼% of
total U.S. imports of textiles and apparel.
Congressional Initiatives
The U.S. Congress has made efforts to stimulate economic growth in poorer
regions of the world, to a great extent by providing textile and apparel trade benefits.
Among its measures, Congress has eased trade terms on textiles and apparel from
Caribbean, sub-Saharan, and Andean region nations. Given the large role usually
played by textiles and apparel in early industrial development, as noted earlier, it is
reasonable to expect that these industries would be among the first to grow rapidly
in these regions.12
11 The problems relate especially to agriculture, services, intellectual property rights
protection, and transparency of trade laws and regulations.
12 See also CRS Report RS20063, U.S. Sub-Saharan Africa Trade and Investment:
Programs and Policy Direction, by Lenore Sek, CRS Issue Brief IB95050, Caribbean Basin
Interim Trade Program: CBI/NAFTA Parity, by Vladimir N. Pregelj, and CRS Report
RL30790, The Andean Trade Preference Act: Background and Issues for Reauthorization,
by J. F. Hornbeck.

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Sub-Saharan Africa
Africa presently exports only small amounts of textile and apparel products to
the United States. Significant measures to improve U.S. economic relations with
sub-Saharan Africa began in the mid-1990s. In 1994, the Uruguay Round
Agreements Act (P.L. 103-465) directed the Administration to develop an Africa
trade and development policy and report on this policy to Congress annually for five
years. The Administration's first report spurred Congressional interest in African
economic growth and in improving U.S.-sub-Saharan economic relations. The
Partnership for Economic Growth and Opportunity in Africa, announced by President
Clinton in 1997, supported economic reforms in Africa and encouraged closer
economic ties between the United States and Africa; it incorporated ideas Congress
was considering at the time.
Together with several other measures, the Trade and Development Act of 2000
(P.L. 106-200, enacted May 18, 2000) liberalized trade with qualifying sub-Saharan
and Caribbean Basin counties. In addition to broad provisions aimed at encouraging
economic development and trade, Title I, the African Growth and Opportunity Act
(AGOA), gave preferential treatment to certain apparel articles from countries
meeting transhipment requirements. Items admitted duty-free and quota-free include
apparel assembled from fabrics wholly formed and cut in the United States and yarn
wholly formed in the United States, apparel cut and assembled or knit-to-shape from
fabrics or yarns wholly formed in the United States, knit-to-shape sweaters made
from certain wools, and certified handmade and folklore articles. Certain other
apparel items are free of duties and quantitative restrictions up to a specified level of
imports.
The Trade Act of 2002 (P.L. 107-210) liberalized benefits under AGOA, and
CBERA (under Title XXXI) – in addition to providing trade promotion authority to
the President and liberalizing trade adjustment assistance to workers. Sub-Saharan
benefits were liberalized by a clarification that apparel assembled from knit-to-shape
components made in the United States and garments from components cut both in the
United States and beneficiary countries are eligible for preferential treatment, and it
increases the import cap on certain duty-free apparel items. In the short run,
increased African production generally is likely to affect the U.S. textile and apparel
industries very little, largely because it starts from a very small base.
The Caribbean and Central America
The Caribbean Basin Economic Recovery Act (CBERA) established the
Caribbean Basin Initiative (CBI), putting into law (effective January 1, 1984) trade
preferences (and some other benefits) in the form of unilateral preferential treatment
(duty-free, or at duty rates lower than those generally applicable) for most articles
imported from 24 beneficiary countries. The Caribbean Basin Economic Recovery
Expansion Act of 1990 made the program permanent. Eligible for duty-free
preference were all otherwise dutiable products except certain import-sensitive items,

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CRS-8
including textiles and apparel subject to textile agreements.13 However, the tariff and
quota treatment of imports from Mexico under the North American Free Trade
Agreement put imports from the countries intended to benefit from CBERA at a
disadvantage vis à vis imports from Mexico. Congress has considered and passed
legislation to address this.
Title II of P.L. 106-200 (Caribbean Basin Trade Partnership Act) focused mainly
on the preferential treatment of textiles and apparel. It added several eligibility
criteria and set the transitional period of preferential treatment to run from October
1, 2000 through September 30, 2008. Articles accorded duty-free and quota-free
treatment include apparel assembled in a beneficiary country from fabric wholly
formed and cut in the United States from U.S.-made yarn, or from U.S.-made fabric
from U.S.- made yarn cut in a beneficiary country, and sewn with U.S.-made yarn.

Caribbean Basin benefits were liberalized by the 2002 Trade Act through a
substantial increase in the quota ceilings for knit-to-shape apparel and exclusion of
the cost of trimmings and findings from the cost of U.S. fabric components.
Andean Countries
The Andean Trade Preference Act (ATPA) (P.L. 102-182, Title II) provided a
10-year period of duty free or reduced-rate treatment of selected products from
Bolivia, Colombia, Ecuador, and Peru that excluded textiles and apparel. This was
a limited program, enacted in part to counter illicit drug production and trade by
enhancing other economic opportunities; and it expired December 4, 2001. After a
delay, Congress reinstated and extended the scope of the benefits to include some
textile and apparel products.
The Trade Act of 2002 effectively reinstated and liberalized the Andean Trade
Preference Act. The Andean provisions extend the ATPA to December 31, 2006 and
newly include certain textile and apparel items as eligible for duty-free treatment.
However, the 2002 Trade Act also specifies that all dying, printing, and
finishing of U.S.-made fabric incorporated in imported apparel must occur in the
United States for that apparel to be eligible for CBERA or ATPA benefits. This
requirement had been sought vigorously by the U.S. textile industry.
Industry Concerns
The extent of these trade benefits is constrained by concerns that growth of
textile and apparel production in the above regions has caused and could cause
further difficulty for segments of the U.S. textile and apparel industries, which have
13 There is a special program for apparel assembled in a CBERA country and imported
under the “production sharing” provision, provided it is assembled from U.S. formed and
cut fabric. Such apparel may be imported above regular quotas up to bilaterally agreed
“guaranteed access levels” at the regular duty rate applied to a base that excludes the value
of U.S.-origin components.

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CRS-9
been affected negatively by “normal” gains in textile and apparel production by
developing countries. Some argue that these trade benefits shift jobs from Americans
to Africans and Latin-Americans. And, although current imports of textiles and
apparel from these regions may be small in relation to U.S. output, investment in the
textile/apparel sector of these regions could become substantial, and exports with it.
U.S. “Tariff-Free” Proposal
In early December 2002, the U.S. Trade Representative proposed to the WTO
that all tariffs on non-agricultural goods (including textiles and apparel) be
eliminated by 2015 – through a phase out procedure. In Phase One (2005 to 2010),
(a) all tariffs of 5% ad valorem or less would be eliminated, (b) tariffs on a variety
of specific categories of goods would be eliminated, and (c) tariffs above 5% would
be “harmonized” to less than 8% by application of a formula. In Phase Two (2010
to 2015), remaining tariffs would be eliminated through linear cuts.14
The reactions by most countries to the U.S. proposal have not been enthusiastic
so far. According to reports, a number of countries noted that tariffs are important
to developing countries as a source of government revenues and as protectors of
infant industries. Another reported objection is that the proposal undermines the
advantages of preferences to beneficiary countries of preferential trade programs
(such as those provided by the United States and described in this report under
“Congressional Initiatives”).15 There also is concern about agreeing to a U.S.
nonagricultural goods proposal that is not coupled with an acceptable agricultural
proposal.
In addition, U.S. textile manufacturers have objected,16 and it may be difficult
for the U.S. government to sustain this proposal against the wishes of U.S. textile and
apparel producers.17
14 The formal text of the U.S. proposal to the WTO and supplemental materials can be
found at the U.S. Trade Representative’s web site [http://www.ustr.gov]; click on “Tariff
Free World.”
15 See “U.S. Plan for Scrapping Industrial Tariffs Receives Mixed Reception at WTO
Meeting,” Daily Report for Executives. December 3, 2002 [http://ippubs.bna.com/ip]; and
“U.S. Downplays Cool Response to Market Access Proposal in WTO,” Inside U.S. Trade,
December 6, 2002.
16 See, for example, letter of December 13, 2002, from a group of 11 associations of textile
manufacturers.
17 “U.S. Plan for Scrapping Industrial Tariffs Receives Mixed Reception at WTO Meeting,”
Daily Report for Executives. December 3, 2003. [http://ippubs.bna.com/ip] It was reported
in this article that some countries doubt that the U.S. would stand up to the textile industry.

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