Forum discusses “End of WTO Multi-Fiber Agreement and Implications for SAARC Countries”

The second meeting of the SAIS (School of Advanced International Studies of Johns Hopkins University) -SAARC (South Asian Association for Regional Cooperation) Ambassadors’ Forum was held on October 29, 2004 at SAIS, Johns Hopkins University. The second meeting involved a panel discussion entitled, “End of WTO Multi-Fiber Agreement and Implications for SAARC Countries.” This is the first of a series of topics selected by the SAARC Ambassadors rotating in alphabetical order by Embassy. Representatives from five Embassies of the SAARC countries participated in a panel to discuss their viewpoints on how the end of the Multi-Fiber Agreement (MFA) would affect their respective countries.

Ambassador Devinda R. Subasinghe speaking at the Forum said that Sri Lanka played an active role in the Uruguay Round in the early 1990s and prophetically cautioned against ending of textile quotas. Ambassador Subasinghe mentioned that Sri Lanka has a few world class apparel producers who are expected to be winners when the quotas under the Multi Fiber Agreement are abolished on 1st January, 2005. However, he highlighted that one-third of the apparel producers in Sri Lanka, mainly medium and small size apparel manufacturers, will have a difficult time adjusting to the quota free scenario while, another one-third is likely to go out of business. Ambassador Subasinghe also added that Sri Lanka’s apparel industry has pursued a plan to increase competitiveness, move up market and find a niche market for its apparel products. Sri Lanka is also pursuing an aggressive policy of diversification of its export base to mitigate the adverse impact of the abolition of quotas in 2005. He also mentioned that the country has taken cognizance of the importance of trade security issues in terms of port security in the post 9/11 context and has already become partners of the US in its Container Security Initiative (CSI) and the Megaports Initiative.

Assistant US Trade Representative for South Asian Affairs and former US Ambassador to Sri Lanka Ashley Wills speaking at the forum said that the US will honor its commitment under the WTO Apparel and Clothing Agreement and quotas will be phased out in January 2005. He explained that the U.S. is aware of the adverse impact on some of the exporting countries noting the availability of safeguard measures to curb the surge in imports from China. He mentioned that it was important to safeguard the benefits of the trade agreement partners because many of them experienced difficult economic adjustments to qualify for those benefits. Ambassador Wills also said that Washington is “open minded” about a similar, multilateral initiative to help smaller countries impacted by the soon-to-be-free textile trade regime. Assistant USTR Wills said tariffs are not the only factor that will decide “winners” and “losers” in the new regime. Countries that have diversified their economies, applied efficient customs systems, have fair labor laws and put in place lower duties on needed input will stand to gain. He emphasized that those countries that developed niche markets and enhanced their competitiveness were likely to survive the dynamics of Post MFA 2005.

The SAIS-SAARC Ambassadors’ Forum is a unique and timely development in the US Capital given the enhanced US focus on South Asia. The Forum also provides an opportunity for discussion of important contemporary issues that are salient to SAARC, whilst also providing a platform and intellectual arena for SAARC Ambassadors to share their views and gain visibility in Washington. It is driven more by contemporary themes than by events.

The discussions were moderated by Thomas Keaney, Executive Director, Foreign Policy Institute, SAIS. The forum was also addressed by Mr. Peter Minor, Managing Associate, Nathan Associates. Ambassador Syed Hasan Ahmad, Ambassador of Bangladesh to the U.S., Ambassador Keder B. Shrestha, Ambassador of Nepal to the U.S., Dr. V.S. Seshadri, Minister (Commerce), Embassy of India, Mr. Ashraf Hayat, Minister (Trade), Embassy of Pakistan also participated at the panel discussions. The session was attended by a representative gathering of policy makers, academics, graduate students, journalists and diplomats.

Embassy of Sri Lanka
Washington DC
USA

29 October 2004