COTANCE Position Statement
COTANCE Council meeting - Paris, 13 June 2008
Meeting in Paris for the COTANCE Council, the representatives of Italy
(UNIC), Spain (CEC-FECUR), Germany (VDL), France (FFTM), Sweden (SG),
United Kingdom (UK Leather Federation), Netherlands (FNL), Switzerland
(VSG), Belgium (UNITAN), Portugal (APIC), Greece (HTA), Bulgaria (BULFFHI),
reviewed the progress in the current WTO trade negotiations and notably
the latest Draft on Negotiation Modalities for NAMA. COTANCE Members
welcomed the developments in the area of Access to Markets, Sectoral
Negotiations and Non Tariff Barriers, in particular with regard to
Export Taxes and Export Restrictions on Raw Materials. The European
Leather industry expressed, however, concern over the risks that the
DDA may not yield the expected benefits for the Leather trade &
industry.
Europe’s Leather industry is highly concerned with the developments
on raw materials supply markets. Against the background of increased
price volatility in a number of food and non-food commodities, the
sector witnesses a further acceleration in the spreading of export
taxes and export restrictions in hides, skins and wet-blue leather.
There are increasing attempts by several trade partners, notably Brazil,
to further reduce access to Raw Materials. Proximity suppliers maintain
their restrictions even in breach of bi-lateral trade rules banning
them. The outlook for the leather trade & industry in Europe and
many poor countries is preoccupying.
The Modalities for NAMA currently on the table of the WTO/DDA negotiations
do not sufficiently secure fair trading rules in the global leather
value chain.
1. The coefficients for developing countries coupled with the flexibilities
proposed do not yet secure for EU exporters of leather and leather
products improved market access in emerging economies where leather
markets have relocated. Major leather and leather products markets
in emerging economies are likely to end up shielded against imports
to the detriment of mature and infant leather industries. This will
notably have adverse effects for less advanced developing countries
needing access to growing markets for their exports.
2. Although the new text provides for the option of Sectoral Negotiations
in the area of Raw Materials and (Textile, Clothing and) Footwear,
the leather sector does not witness any developments leading to such
a result. The option risks to remain such and not being concretised
by a sectoral trade deal that satisfies rich and poor countries. For
being useful such a sectoral agreement must apply to a critical mass
of countries representing a substantial share of production and trade
and involving notably emerging economies.
3. The Chapter on NTBs providing a timeline for agreements is a positive
step for pushing interested parties to negotiate but the Annex on
Raw Materials has been significantly watered down and risks to end
emptied from the benefits it could yield to the global leather trade
and industry. It must be secured that important producers of raw materials
such as Argentina, Brazil, India, Pakistan sit on the negotiating
table next to the EU, the USA, and other likeminded countries.
The representatives of COTANCE call on the sector’s global
stakeholders to value the merits of a sectoral trade deal based on
the principles conveyed in their COTANCE 2001 Position and to request
their Governments to hammer out in Geneva a deal that can implement
them.
World trade in the leather sector represents US$ 46 billion ranking
among the most important internationally traded commodities (Source:
FAO, World Trade in - Hides, Skins, Leather & Footwear US $ 46
billion; - Meat US $ 17 billion; - Sugar US $ 10 billion; Cotton US
$ 7 billion).
Tariff and Non-Tariff Barriers on imports and exports of the sector’s
products constitute an enormous cost handicap for the Leather industry
worldwide, consuming resources that could be better allocated in increasing
wealth in the Leather industry. They distort adversely global trade
flows and interfere critically in the pricing of supplies causing
irreparable damage to the Leather industry’s structures in rich
and poor nations.
An ambitious tariff liberalisation coupled with an end to export
taxes/restrictions on raw materials (hides & Skins) and intermediate
products (wet-blue leather) in mature and emerging markets would bring
huge benefits to the leather trade & industry in both developed
and developing countries. It would avoid preference erosion for least
developed countries as well as provide them a real opportunity to
grow.
The European Leather Industry plays a key role in the Global Leather
System notably for its leadership in innovation and market development.
It has lost 30% of its companies and workforce over the last decade
due notably to unfair competition from countries maintaining protectionist
barriers preventing access to their markets or excluding their raw
material markets from international competition with export taxes/restrictions.
Such protectionism equally harms the inclusion in international trade
of countries with a less developed leather industry.
Failure to achieve in this WTO Round a firm commitment of trade partners
to open up their markets to international competition and to eliminate
export taxes/restrictions on raw materials would have significant
consequences in the EU leather value chain, its companies and its
workforce as well as on the sustainable development of industrial
know-how, environmental liability, innovation and R&D that Europe
develops benefiting the global leather industry.
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