International Cooperation Based on Fair Trade Practices
Source: GTEF Date: 2007-03-30
At 4th Global Textile Economic Forum on 23rd March 2007 in Beijing
1. The Importance of Fair Trade in the Global Textile Trade Environment
As regional and bilateral free trade agreements (FTAs) continue to increase, after the elimination of MFA quotas in 2005 under the WTO regime, textile trade in the global market is becoming increasingly liberalized.
Such market liberalization and increase in trade volume are likely to trigger unfair practices in textile trade. In this regard, an enhanced international cooperation for fair trade in the textile field is becoming more critical than ever before.
It is clear that the creation of a fair trade environment will prevent negative effects of trade liberalization. Moreover, it will improve economic globalization through facilitating international trade.
2. Trade Barriers to the Development of the Textile Industry and International Cooperation
1) Infringement of Intellectual Property Rights (IPR)
As global textile trade and foreign investment continue to increase, the protection of intellectual property rights (IPR) has developed into a major issue.
Without protecting IPR, we cannot expect any inventions, innovations, creative designs, or ideas. Therefore, IPR is vital for enhancing competitiveness of all industries. I believe this phenomenon is particularly so in case of textile and fashion industries. In this knowledge-based economy, it is urgent to recognize the importance of IPR and close international cooperation in IPR for textile and fashion industries.
2) Illegal Transshipment
Obviously, illegal transshipment should be prevented. Illegal transshipment results in negative impacts on lawful exporters. In addition, illegal transshipment causes importing countries to burden unnecessary expenses in taking protective measures against unfair trade practices of exporting countries.
3) Dumping and Subsidy Exports
In light of WTO rules, textile-exporting companies should not commit unfair trade practices such as dumping and subsidy exports, which could distort international trade order. Consequently, these unfair trade practices will eventually hurt textile industries worldwide in the long run. On the other hand, it also should be noted that any remedy measures against Anti-Dumping or Countervailing should be taken very cautiously and should not be abused.
Even though Anti-Dumping and Countervailing Duty measures are legal trade remedies against unfair trade practices, the initiation of investigations into these protective measures alone could create perverted effects such as trade chilling effects and trade diversion, and even worse these dampening effects appear to offset benefits from trade liberalization.
3. International Cooperation Based on Fair Trade
The textile industry must be developed into a future-oriented one through fair competition. No nation or no individual company will obtain benefits from unfair transactions. Without fair competition and fair trade, international cooperation will lose its ground.
The textile and apparel industries all over the world should refrain themselves from unfair trade practices. Their associations and federations are requested to lead their member companies in this direction and to make necessary recommendations to their respective government to take proper actions against any unfair trade practices.
The government of textile-exporting countries should make every effort to establish legal schemes commensurate with international standards such as WTO rules, to implement them in due process and to take appropriate sanctions against any infringements on IPR, Rules of Origin, or international trade norms. In conclusion, the Korean textile industries propose to set up tentatively named “Forum for a Fair Competition in Textile Trade.”
By Korea Federation of Textile Industries Vice-Chairman, Ha Myeng-Keun
