India along with a few other Third World countries have proposed a
two-year moratorium on anti-dumping actions by industrialised countries after the termination of the agreement on textiles and clothing from January 1, 2005. They have urged the World Trade Organisation’s general council to recommend the proposal for consideration at the forthcoming Cancun ministerial so that the domestic industry is able to “adjust to normal trading conditions” and insulate itself from a downward pressure on prices resulting from the phase-out of the remaining quotas under the agreement. The other countries are China, Hong Kong, Pakistan, Indonesia, Thailand and Vietnam.

The move, which is in accordance with the Doha declaration, implies that the developed world should desist from initiating anti-dumping investigations against products from the developing countries for two years till December 31, 2006.

As per the Doha declaration, “members will exercise particular
consideration before initiating investigations in the context of anti-dumping remedies on textiles and clothing exports from developing countries previously subject to quantitative restrictions under the agreement on textiles and clothing for two years following full integration of this agreement with WTO.” In the Doha declaration, the ministers had also pledged to reject the use of protectionism.

The precise parameters for giving effect to the above decision are
however yet to be established. Nor have the developed countries spelled out the manner in which they propose to give effect to this proposal.

The ministers have also repeatedly emphasised the need for the Third World to benefit from increased opportunities that the multilateral trading system generates. Besides, pledging to reject the use of protectionism, they also affirmed their will to continue to make positive efforts designed to ensure that the developing countries secure a share in the growth of trade commensurate with the needs of their economic development.

The agreement on textiles and clothing, which replaced the multi-fibre arrangement, became effective from January 1, 1995 and is due to be terminated at the end of the 10-year transition period on December 31, 2004.

However, while implementing the agreement, commerce ministry officials point out that industrialised countries such as the European Union, the United States and Canada, have left the bulk of quota restrictions to be eliminated at the end of the transition period. Thus, even after eight-and-a-half years of implementation, quotas still remain place: 851 out of 932 in the US, 222 out of 303 in the EU and 292 out of 368 in Canada. Their actions are bound to exert a downward pressure on prices and encourage the domestic industry to cry dumping and spark pressures for greater recourse to alternative forms of protection, especially anti-dumping.

Officials also point out that the very initiation of probes into
alleged dumping causes considerable adverse effects on exporters and businesses concerned.