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

2. Source: World_Trade_Organization_member_observer_states_2014_yemen_sm

3. * Structure of WTO

4. • 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

5. *Cont….
2 W.T.O agreements
• Sanitary and Phytosanitary measures agreement (SPS)
• Technical Barriers to Trade Agreement (TBT)

6. *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.

7. 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

8. *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

10. *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

11. • 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

12.  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

13. • 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: sms.mofcom.gov.cn/accessory/200812/1228894517064
*Current issues in SPS

14. *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

15. *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: http://www.standardsfacility.org/project-grants

16. • “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

17. 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..

18. • 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

19. *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.

20. *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

21. *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..

22. 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.

23. *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..

24. *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

25. *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

26. 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

27. 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..

28. *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..

29. *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

30. *Cont..

31. *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.

32. *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..

35. • 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

36. * 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..

37. *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.

38. 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..

39. *Textile Industry In Bangladesh
*The textiles and clothing industry is Bangladesh’s biggest export
earner
Source: Board of Investment, Bangladesh (Prime Minister’s Office)

40. • 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..

41. *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

42. *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

43. *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..