WRITTEN QUESTION E-0654/96 by Honório Novo (GUE/NGL) and Joaquim Miranda (GUE/NGL) to the Commission (15 March 1996)

Subject: Trade agreements with India and Pakistan and the Portuguese textile industry

The basic points of the trade agreements to be established between the EU and India and Pakistan, which were approved by the Council on 26 February 1996, will inevitably lead to a considerable worsening of the already difficult situation faced by the Portuguese textile industry.

This will happen not only as a result of the sharp increase in unequal competition in this sector but also because the proposals for access to the markets of these countries and the requirement that this should be on the basis of average Community prices will, objectively, exclude Portuguese exports.

As a result of these trade agreements, the already stringent conditions laid down by the GATT agreements are now being challenged, the adverse effects of the agreements are increasing and the limited scope of the Community measures adopted at the time to mitigate them is being further diminished.

How does the Commission reconcile the terms of these agreements with the references in the Council statement of 15 December 1993 to a lengthy transition period and the need for reciprocity by third countries in opening up markets?

Does the Commission plan to update the amount of ECU 400 m for the Portuguese textile industry in the light of these agreements?

Does the Commission intend to continue this strategy of speeding up the liberalisation of trade with third countries without carrying out advance impact studies?

Answer given by Sir Leon Brittan on behalf of the Commission (2 April 1996)

The Commission does not share the view expressed by the Honourable Members that the agreements with India and Pakistan might have a detrimental effect on the Portuguese textiles industry. On the contrary, these agreements open up the markets of India and Pakistan which had maintained a total ban on all imports of textiles and clothing for over 40 years. The agreements stipulate the opening up of the Indian and Pakistani domestic markets by considerably reducing tariff levels and by gradually removing quantitative restrictions. The concessions made by India and Pakistan to the Community cover all major export items of the European industry (85% of Portuguese exports are covered by the Indian arrangement).

The agreements with India and Pakistan, which it must be recalled were negotiated as part of the Uruguay round market access negotiations, are in the Commission's view perfectly coherent with the conclusions of the Council Declaration of 15 December 1994.

The Commission is not aware of pricing obligations imposed on Portuguese exporters. The Portuguese industry is one of the most competitive in many products and should benefit from a more aggressive export strategy.

Moreover, the agreement on textiles and clothing of the Uruguay round, far from having a negative impact on Community production as suggested by the Honourable Members, delays the integration of the textiles sector into normal GATT rules and procedures for a further period of 10 years after the four successive roll-overs of the Multi fibre arrangement.

The Commission approved in October 1995 the Portuguese programme for the modernisation of the textile and clothing industry. The Commission attaches considerable importance to the use of the 400 MECU already granted to Portugal and will ensure that these additional funds do not lead to competition distortion with comparable industries in other Member States and that they are used to promote the modernisation and international competitiveness of the Portuguese industry.

Finally, the Commission has presented an assessment of the impact of international developments on the textiles and clothing sector in a communication to the Council, the Parliament, the Economic and social committee and the Committee of the regions ((COM(95) 447 final. )).