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Textile and Safty & Standards


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Scenarios prevailing in Textile industry all over the world, various standards, role of WTO.
Various Safety measures and standards followed all over world.

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Textile and Safty & Standards

  1. 1. Source: World_Trade_Organization_member_observer_states_2014_yemen_sm
  2. 2. * Structure of WTO
  3. 3. • Ensure that • your country’s consumers are being supplied with food that is safe to eat. • strict health and safety regulations are not being used as an excuse for protecting domestic producers • Article 20 of the General Agreement on Tariffs and Trade (GATT) allows governments to act on trade in order to protect human, animal or plant life or health, provided they do not discriminate or use this as disguised protectionism. *Standards and Safety
  4. 4. *Cont…. 2 W.T.O agreements • Sanitary and Phytosanitary measures agreement (SPS) • Technical Barriers to Trade Agreement (TBT)
  5. 5. *TBT Objectives • Covers all technical regulations, voluntary standards and the procedures to ensure that these are met. • National security or the prevention of deceptive practices. • Measures related to human disease control, unless they concern diseases which are carried by plants or animals (such as rabies). • Labelling requirements, nutrition claims and concerns, quality and packaging regulations.
  6. 6. Human or risks arising from additives, animal health contaminants, toxins or disease organisms in food, drink, feedstuff Human life plant- or animal-carried diseases Animal or pests, diseases, disease-causing plant life organisms A country other damage caused by entry, establishment or spread of pests from from from from *SPS Agreement Objectives
  7. 7. *Differences Between SPS & TBT SPS • Based on scientific evidence • Risk assessment from pests, diseases, additives, contaminants, toxins... • Pesticide or veterinary drug residues or identify permitted food additives TBT • Based on legitimate objective: - national security, - prevention from deceptive - Human disease control - food, labelling requirements, nutrition claims & concerns, quality and packaging regulations
  8. 8. *Examples of TBT & SPS Measures TBT *Labeling of composition or quality of food, drink and drugs *Quality requirements for fresh food *Volume, shape and appearance of packaging *Testing vehicles and accessories *Regulations for ship and ship equipment *Safety regulations for toys SPS *Additives in food or drink *Contaminants in food or drink *Certification of food safety, animal or plant health *Processing methods with implications for food safety *Other sanitary requirements for imports *Labeling requirements directly related to food safety and others
  9. 9. • Collection of international food safety standards • Protecting public health and minimizing disruption of international food trade and developing relevant international standards (explicitly under SPS, by implication under TBT) • Identifies relevant scientific experts for WTO dispute cases (especially SPS) • Develops risk assessment techniques (SPS) *Role of CODEX in WTO
  10. 10.  US/ Canada case against EC ban on hormone-treated meat (SPS)  US / Canada / Argentina case against EC on GMOs (SPS)  Peru case against EC designation of “sardines” (TBT) *CODEX in WTO Disputes
  11. 11. • Food safety and Animal and Plant health • Food safety: • US/Canada vs. EC - Hormones (WT/DS26, 48) • US/Canada/Argentina vs. EC - Biotech (WT/DS291, 292, 293) • EC vs. US/ Canada - Retaliation on Hormones (WT/DS320, 321) • Plant Protection: • US vs Japan - Variety Testing (WT/DS76) • US vs. Japan – Fire blight (WT/DS245) • Philippines vs. Australia - Tropical Fruit (WT/DS270) • New Zealand vs. Australia - Apples (WT/DS367) • Animal health: • Canada / US vs. Australia - Salmon (WT/DS18, 21) Source: *Current issues in SPS
  12. 12. *Standards and Trade Development Facility(STDF) *Joint initiative of FAO, OIE, World Bank, WHO and WTO *Global partnership *Supports developing countries in building their capacity to implement international SPS standards, guidelines and recommendations *Means to improve their human, animal, and plant health status and ability to gain or maintain access to markets
  13. 13. *STDF Financing Available *Funds up to normally US$20,000 are available for project preparation grants *Funds up to normally a maximum of US$1 million are available for project implementation. Grants for projects (US$ 300,000 to 600,000) *Least developed and other low income countries - 10% contribution *Other developing countries – 30% contribution *Focuses mostly on innovation and collaboration Sources:
  14. 14. • “A planned EU/US trade deal should sweep away "non-scientific barriers" to US sales of many genetically modified crops and some chemically treated meats in Europe”, the US agriculture secretary said on 17th June 2014 • It could boost their economies by $100 billion (€74bn) a year each • Vilsack: “Science is a common language” • Eliminating "non-scientific barriers” • Delay to gain access to European markets after winning clearance from the European Food Safety Authority. *EU/US Trade Deal World's Largest Free-trade Pact
  15. 15. Safety argument • Ecological group Greenpeace says GM crops are part of large-scale intensive farming which degrades soils and pollutes water • It says they create herbicide-resistant super weeds that require more pesticides and are not proven to be safe to eat, with much of the research funding coming from industry • EU insisting on a label indicating a foodstuff contained a GM product risked sending a wrong impression • The European Commission said what could be offered to the United States was the possibility of exporting a greater quota of hormone- free beef, as has already been agreed between the EU and Canada. *Cont..
  16. 16. • India had banned imports of various agricultural products from the US in 2007, as a precautionary measure to prevent outbreaks of Avian Influenza in the country • The World Trade Organization's dispute panel said that restrictions imposed by India on imports of poultry from America were "inconsistent" with the international norms • India's measures are arbitrarily and unjustifiably discriminate between Members where identical or similar conditions prevail and are applied in a manner which constitutes a disguised restriction on international trade • US exports to India of just poultry meat alone could easily exceed USD 300 million if barriers are removed *India Loses WTO Case Against US on Poultry Imports On October 14, 2014
  17. 17. *Textiles : Back in the mainstream *Textiles, like agriculture, was one of the hardest-fought issues in the WTO, as it was in the former GATT system. *It has now completed fundamental change under a 10-year schedule agreed in the Uruguay Round. *The system of import quotas that dominated the trade since the early 1960s have now been phased out. *From 1974 until the end of the Uruguay Round, the trade was governed by the Multi fibre Arrangement (MFA) *Since 1995, the WTO’s Agreement on Textiles and Clothing (ATC) took over from the Multi fibre Arrangement.
  18. 18. *Cont.. *By 1 January 2005, the sector was fully integrated into normal GATT rules *Textiles and clothing products were returned to GATT rules over the 10-year period. *Took place in four steps to allow time for both importers and exporters to adjust to the new situation over 10 years period
  19. 19. *For products that had quotas, the result of integration into GATT was the removal of these quotas *The agreement stated the percentage of products that had to be brought under GATT rules *The agreement said the quantities of imports permitted under the quotas had to grow annually, and that the rate of expansion had to increase *Cont..
  20. 20. Step % of products to be brought under GATT (including removal of any Quotas) % of products to be brought under GATT (including removal of any Quotas) Step 1: 16% 6.96% 1 Jan 1995 ( to 31 Dec 1997) (minimum, taking 1990 imports as base) per year Step 2: 17% 8.70% 1 Jan 1998 (to 31 Dec 2001) per year Step 3: 18% 11.05% 1 Jan 2002 (to 31 Dec 2004) per year Step 4: 49% No Quotas left 1-Jan-05 (maximum) > Full Integration into GATT (and final elimination of Quotas) >Agreement on textiles and Clothing terminates. The actual formula for import growth under quotas was: by 0.1 x pre-1995 growth rate in the first step; 0.25 x Step 1 growth rate in the second step; and 0.27 x Step 2 growth rate in the third step.
  21. 21. *Products brought under GATT rules cover the four main types of textiles and clothing: tops and yarns; fabrics; made-up textile products; and clothing *Damage to the industry arose during the transition, the agreement allowed additional restrictions to be imposed temporarily under strict conditions. *“Transitional safeguards” were not the same as the safeguard measures normally allowed under GATT because they can be applied on imports from specific exporting countries *Safeguard restriction *Reviewed by Textiles Monitoring Body (TMB) *Cont..
  22. 22. *Textiles Monitoring Body (TMB) *Supervises the agreement’s implementation *Consists of Chairman & 10 members *Also deals with disputes under the Agreement on Textiles and Clothing *Monitors actions taken under the agreement to ensure that they were consistent *Reports to the Goods Council which reviews the operation of the agreement before each new step of the integration process *Unresolved disputes will be brought to the WTO’s regular Dispute Settlement Body *When the Textiles and Clothing Agreement expired on 1 January 2005, the Textiles Monitoring Body also ceased to exist
  23. 23. *Multi Fibre Arrangement (MFA) 1974-1994 *Major departure from the basic GATT rules and particularly the principle of non-discrimination *Up to the end of the Uruguay Round, textile and clothing quotas were negotiated bilaterally and governed by the rules of the Multi fibre Arrangement (MFA) *Application of selective quantitative restrictions when imports of particular products cause, or threaten to cause, serious damage to the industry of the importing country *1 January 1995 replaced by the WTO Agreement on Textiles and Clothing which sets out a transitional process for the ultimate removal of these quotas
  24. 24. The ATC is a transitional instrument, built on the following key elements: a) the product coverage, basically encompassing yarns, fabrics, made-up textile products and clothing; b) a programme for the progressive integration of these textile and clothing products into GATT 1994 rules; c) a liberalization process to progressively enlarge existing quotas (until they are removed) by increasing annual growth rates at each stage; d) a special safeguard mechanism to deal with new cases of serious damage or threat thereof to domestic producers during the transition period; *WTO Agreement on Textiles and Clothing (ATC) 1995-2004
  25. 25. e) establishment of a Textiles Monitoring Body (“TMB”) to supervise the implementation of the Agreement and ensure that the rules are faithfully followed; f) other provisions, including rules on circumvention of the quotas, their administration, treatment of non-MFA restrictions, and commitments undertaken elsewhere under the WTO's agreements and procedures affecting this sector *Cont..
  26. 26. *In December 1997, the General Council decided upon the composition for the second stage (1998-2001) with TMB members to be appointed by WTO Members designated from the following constituencies: 1. India and Egypt/Morocco/Tunisia 2. Japan 3. Latin American and Caribbean Members 4. The United States 5. Turkey, Switzerland and Bulgaria/Czech Republic/Hungary/ Poland/Romania, Slovak Republic/Slovenia. 6. ASEAN Member countries 7. Canada and Norway 8. Pakistan and China (after accession) 9. European Communities 10. Korea and Hong Kong *Cont..
  27. 27. *Textile Industry In India *World's second largest producer of textiles and garments *The Indian textiles industry accounts for about 24 per cent of the world's spindle capacity and eight per cent of global rotor capacity *The potential size of the Indian textiles and apparel industry is expected to reach US$ 223 billion by 2021 *Major contribution to the national economy in terms of direct and indirect employment generation and net foreign exchange earnings *Sector contributes about 14% to industrial production, 4% to the gross domestic product (GDP), and 27% to the country's foreign exchange inflows. *It provides direct employment to over 45 million people *Second largest provider of employment after agriculture
  28. 28. *Cont..
  29. 29. *Market Size *Strong growth by strong domestic consumption as well as export demand *Most significant change in the Indian textiles industry has been the advent of man-made fibres (MMF) which are placed across globe *MMF production recorded an increase of three per cent during the period April-July 2014. *Cotton yarn production increased by four per cent during April-July 2014 *Blended and 100 per cent non-cotton yarn production increased by five per cent during April-July 2014.
  30. 30. *Cloth production by mill sector registered a growth of six per cent during April 2013-July 2014. *Cloth production hosiery sector increased by eight per cent during April- July 2014 *Total cloth production grew by two per cent during April-July 2014 *Cont..
  31. 31. • The industry (including dyed and printed) attracted foreign direct investment (FDI) worth US$ 1,495.07 million during April 2000 to September 2014 • Some of the major investments in the Indian textiles industry are as follows: 1. Arvind Lifestyle plans to invest Rs 126 crore (US$ 20.37 million) as capital expenditure this fiscal to expand its footprint 2. Sangam India plans to venture into the seamless garment segment with an investment of Rs 120 crore (US$ 19.39 *Investments
  32. 32. * Mr Bagri's Metmin Investment Holdings has bought a 30 per cent stake from private equity (PE) firm Avigo Capital, which owns a majority stake in Spykar. * Arvind Lifestyle Brands plans to foray into the children's wear retail segment in India, as it has signed a franchisee agreement worth US$ 1.8 billion with US-based The Children's Place. * Private Equity (PE) firm Everstone plans to invest Rs 100 crore (US$ 16.16 million) for an undisclosed minority stake in the fashion label of designer Ritu Kumar. *Cont..
  33. 33. *Govt. Initiatives *The Indian government has come up with a number of export promotion policies for the textiles sector. *It has also allowed 100 per cent FDI in the Indian textiles sector under the automatic route. *Some of initiatives taken by the government to further promote the industry are as under: 1. The Ministry of Textiles plans to ink a deal with Flipkart to provide an online platform to handloom weavers to sell their products. 2. The Ministry of Textiles will implement the scheme for in-situ up gradation of plain power looms for SSI sector in Surat and Ahmedabad power loom clusters in Gujarat. 3. The government has taken a number of initiatives for the welfare and development of the weavers and the handloom sector.
  34. 34. 4. Encouraged by the turnaround in textiles exports, the Government of India plans to set up a US$ 60 billion target for the current financial year, a jump of over 30 per cent from the previous financial year. 5. The Cabinet Committee on Economic Affairs (CCEA) has approved an Integrated Processing Development Scheme (IPDS) with a corpus of Rs 500 crore (US$ 80.82 million) to make textiles processing units more environment-friendly and globally competitive *Cont..
  35. 35. *Textile Industry In Bangladesh *The textiles and clothing industry is Bangladesh’s biggest export earner Source: Board of Investment, Bangladesh (Prime Minister’s Office)
  36. 36. • Clothes/textile makes up 80 percent of the country’s export. • There are 5,600 factories with 4 million workers. • In 1990, there were only 759 factories and340,000 employees in the industry. Source: Board of Investment, Bangladesh (Prime Minister’s Office) *Cont..
  37. 37. *Favored Trading Status *Bilateral agreements with 28 countries and Generalized System of Preferences (GSP) of the EU are key reasons for Bangladesh RMG products having access to global markets. *Bangladesh is now a significant Ready Made Garment supplier to North America and Europe *The Bangladesh RMG industry has depended largely on imported yarns and fabrics and produced only 10% of the export-quality cloth used by the garments industry *The need for establishment of backward-linkage industry has become an immediate concern to the government *there are enormous opportunities to set up a composite textiles industry combining textile, yarn and garments
  38. 38. *Investment Opportunities and Government Support *Backward linkage is a significant trading opportunity and is supported by a government backed incentive * 15% cash subsidy of the fabric cost to exporters sourcing fabrics locally *Establishment of new textile/RMG mill in the private sector *Joint ventures with the existing textile/RMG mill *Acquisition of public sector textile mills that are being privatized *Indirect investment through financial services and/or leasing
  39. 39. *The government is supporting spinners by providing lower tariffs for machinery spares and raw materials, cash incentives, reduced tax rate, and low-cost funding etc. *The most beneficial public policy of introducing back to back Letter of Credit and bonded warehouse facilities provide a tremendous impetus to the export scenario in Bangladesh *Cont..