China Agrees to Report on LDC Textile Competitiveness

July 26, 2006

Under an agreement worked out January 20, China will allow the WTO Secretariat to prepare a report on the competitive impact of the end of the international textile quota system for Least Developed Countries (LDCs). The LDCs had requested a more extensive report last October. That request, which required the consensus of all WTO members to proceed, was blocked by China. China has acquiesced in the recent request for a more limited report, which will study ways to improve the competitive position of the LDC members of the WTO rather than examining other factors experts believe will lead to China's dominance of the global textile industry.

While agreeing to such a study represents a shift in China's policy on the question of discussing the end of the quota system, the effect of this decision will be minor. There is no deadline for the report and no WTO member would be bound by its recommendations. Furthermore, the study will apply exclusively to LDCs, excluding some WTO members that would have preferred to be included.