WORLD TRADE  
ORGANIZATION  G/C/W/497 
25 October 2004  
 
(04-4524) 
Council for Trade in Goods Original:   English 
   
TURKEY’S CONTRIBUTION TO THE DEBATE 
ON POST-ATC RELATED-ISSUES 
 
 
 The following communication, dated 25 October 2004, is being circulated at the request of the Delegation of Turkey. 
 
_______________ 
 
  Textile and clothing sector is one of the mo st global industries in the world today. It 
constitutes a major source of income and empl oyment for many countries, especially for the 
developing ones. This sector also plays a cruc ial socio-economic role in many of countries’ 
development efforts, by offering en try-level jobs for unskilled labor. The clothing sector in particular 
employs a larger number of workers, the majority  of which are female as also indicated in the 
Discussion Paper of the WTO
1. 
 
 Businesses engaged in this sector vary from small and medium size enterprises employing 
labor-intensive methods of production, to highly automated and technologically advanced, large scale 
units. However, in many countries, textile and clothing  sector is dominated by small-scale enterprises.   
  For more than forty years, textiles and clot hing sector has received more comprehensive and 
persistent protection than any other industrial sector . Integration of trade in textiles and clothing into 
the GATT system was one of the hardest-fought issues during the Uruguay Round and in this regard, the Agreement on Textiles and Clothing (ATC) is c onsidered one of the bigg est achievements for the 
developing countries.    Even though the rationale of the quota system was to provide a temporary relief so that the 
quota imposing countries’ industries could adjust for international competition on their own, many 
developing and the least developed countries, with th e help of a guaranteed market share, have been 
able to use the system to develop their textile and clothing exports.  
 At present, for a good number of the deve loping countries, the sector is the main 
source of export   revenue, accounting in some instance for as much as  90% of manufacturing 
exports. Depending on the country,  the sector also accounts for 20-60% of manufacturing 
jobs. These figures are more than enough to  show how some countries' economies are 
dependent on this sector. This fact is often compounded by the dependence on European 
Union and/or the United States’ markets, whic h together absorb the lion's share of world 
textile and clothing imports.  
 Today, just a few months before the end of the ATC, it can be clearly put forward that the 
sustainability of textiles and clothing sectors are at stake in many developing and the least developed countries. 
                                                     
 
1 WTO Discussion Papers, No: 5, The Global Textile  and Clothing Industry Post the Agreement on 
Textiles and Clothing, 2004. G/C/W/497 
Page 2  
 
  In the third integration period of the ATC,  the WTO members have witnessed a dramatic 
transformation of global production and sourcing patterns in this sector.  
 In some of the liberalized quota categories in the US market the increase of  Chinese products soared 
as high as 800% in 2002. Also, the unit price dec line in those liberalized categories was around 60%.
2 
This is also true for the EU market. In some indi vidual categories, the expansion of market share has 
multiplied several times over with an average unit price reductions of up to 75%3.  
  Nevertheless, developments in the Japanese textile and clothing market between 1990 and 
2002 display another sign of such dramatic change  in that period. The share of Japanese imports 
originating from a single country soared from 31% to 79%.
4 
  Numerous credible studies on the implications of the quota phase-out have shown, by the removal of quotas by 2005, global textile and cl othing trade will be monopolized by a WTO member 
with an estimated share of 50% or more. It is also  important to stress that the quantitative restrictions 
that will be eliminated by 2005, cover both the mo st sensitive and the highest value-added products. 
As a result of this, more than 30 million jobs around th e world are estimated to be lost to a few in a 
short span of time.   The textiles and clothing sector takes substan tial place in Turkey’s economy and foreign trade 
as well. It constitutes the largest industry and accounts for 10% of GDP, 22,6% of manufacturing 
output, and %21 of employment in manufacturing sect or. Turkey’s exports of textile and clothing 
products contributed 34.4% to total merchandise expor ts in 2003. The EU has traditionally been the 
main market, followed by the United States.  
 The comprehensive report of the Textiles Monitoring Body on the implementation of the 
ATC during the third stage of integration process draw s WTO members’ attention to the fact that the 
post-ATC period will bring about important trad ing opportunities and challenges that the WTO 
members will have to face.  It is very clear that full implementa tion of the ATC is fundamental to the 
credibility of the multilateral trading system. Howe ver, the current data indicate that market 
dominance will limit the opportunities only for a sma ll number of countries, whereas the great 
challenges are going to be left to the rest. In th at case, the economic and social disruption will be 
significant for many developing a nd the least developed countries. 
  It should also be noted that the prospective problem, besides the least developed ones, is in 
the interest of many developing countries. To that  end, it should permanently be kept in the WTO 
agenda unless an urgent satisfactory solution is ge nerated for all countries that will be affected 
negatively. 
 
 The ambitious agenda of ongoing market acc ess negotiations for non-agricultural products 
under Doha Development Agenda too, necessitates an urgent full review of global textile and clothing 
production, export and market circumstances so as to develop appropriate remedies within the 
multilateral trade system. In this respect, the ongoi ng market access negotiatio ns for non-agricultural 
products provide us with an  opportunity to develop a ppropriate trade policies that will be needed from 
2005 onwards.   
                                                     
 
2 http://www.otexa.ita.doc.gov/Safeguard_intro.htm  
 3 CCoommmmuunniiccaattiioonn  ffrroomm  tthhee  CCoommmmiissssiioonn  ttoo  tthhee  CCoouunncciill  oonn  tthhee  ffuuttuurree  ooff  tthhee  tteexxttiilleess  aanndd  ccllootthhiinngg  
iinndduussttrryy  iinn  tthhee  eennllaarrggeedd  EEUU,,  ddaatteedd  2299tthh  OOccttoobbeerr  22000033.. 
4 Structural Adjustment in Textile and Clothing in  the Post-ATC Trading E nvironment, OECD Trade 
Policy Working Paper No:4, TD/TC/WP(2004)23/FINAL, Page 39   G/C/W/497 
 Page 3 
 
 
 All of the WTO member countries have a respons ibility to address the justifiable concerns of 
the developing as well as the least developed countries about the sustainability of their economic growth and its main components such as textile and clothing exports.    Turkey strongly believes that the  answer to the question of how  the major challenges ahead 
are going to be handled should be given by the all WTO countries in compliance with their WTO 
commitments and by developing appropriate re medies within the multilateral trade system. 
  It is obvious that there are rules in place in order to protect domestic markets against unfair trade practices. Likewise, there is a strong need fo r the establishment of such mechanisms to protect 
the market shares of the developing countries in their export markets. 
  At this stage, various options; from a mon itoring mechanism that will concentrate on the 
threat of market distortions to a unique safeguard mechanism that has a self-triggering structure  and 
aiming at smooth functioning of trade in the major export markets and avoiding unfair practices can 
be discussed towards a comprehensive and e xhaustive solution under a WTO work program.  
  Consequently, new mechanisms should urgently be developed to ensure smooth transition to 
the quota free trading environment if international trade is to stay as the engine of sustainable development. There is no doubt that timely and fully implementation of the WTO commitments is 
vital for the credibility of the multilateral trading syst em. Likewise, it should also be kept in mind that 
all WTO members are in need to benefit from the increased opportun ities and welfare gains that the 
multilateral trading system generates. Moreover,  it is WTO member countries’ commitment to 
continue their positive efforts to ensure that deve loping countries, and especially the least developed 
among them, secure a market share in the growth of world trade commensurate with the needs of their 
economic development
5. In this respect, the ne w mechanisms should make the WTO more flexible 
while responding to the needs of many developing count ries timely and efficiently. This will, in turn, 
definitely enhance the credibility of the WTO system.  
  The complexity of the challenges that ma ny developing countries will face, of course, 
requires policy coherence between the WTO and other relevant international organizations. However, 
it is clear that the WTO is the sole address to solve problems originating from the conduct of trade 
relations among its members in matters related to  the WTO agreements and other associated legal 
instruments.  
 
__________ 
  
                                                     
 
5 The Preamble, Marrakesh Agreement Esta blishing The World Trade Organization.