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Market Access in Textiles and Clothing: Linkages Between Trade and Trade Policy
published in Issue 117, May-June 2005
Quotas on international textile and clothing trade were finally eliminated at the end of 2004 in accordance with the Agreement on Textiles and Clothing (ATC). Since then, the attention of policy makers has shifted to the question of import tariffs. Tariffs on imports of textiles and clothing in major developed countries are high relative to those levied on other industrial products. Significant reductions in these tariffs would therefore open up opportunities for trade expansion, which would be of particular benefit to developing economies.
However, the potential for tariff reduction is hampered by the fact that developed countries employ preferential tariff rates or duty-free access to favour particular countries or regions as part of their trade policies. A further complication is the use of origin rules which restrict preferential treatment to garments made either from local materials, or from materials made in the country or region granting special treatment—such as the USA or the EU. To achieve a comprehensive reduction in tariffs—and hence an expansion of trade—a shared understanding and appreciation of the issues is needed. The Doha Round of international trade talks provides a timely forum for the discussion of such issues.