Developing countries in the World Trade Organisation remain split over what, if any action, the WTO should take to help smaller textiles producers expected to be hit hard when a decades-old global system of export quotas expires at the end of this year.

A meeting of the WTO's goods council on Thursday heard that informal consultations on a proposal by 10 developing nations for a WTO country-by-country study of textile adjustment problems and how to tackle them had failed to produce agreement.

Many poorer countries, such as Mauritius, that have built up textiles industries on the basis of guaranteed quotas for exports to the US and Europe say they will not be able to withstand the competitive onslaught from efficient low-cost producers, especially China.

China's share of the $350bn global trade in textiles and clothing could more than double from a quarter to 50 per cent once the quotas are eliminated.

India, Pakistan and a handful of others are also expected to benefit but many smaller producers in Asia, the Caribbean and Africa fear extinction with the loss of as many as 27m jobs worldwide.

Moves by the US textiles industry to secure restrictions on Chinese imports into the huge US market from next year, under a special safeguard clause in China's WTO accession agreement, have been backed by more than 50 developing countries.

The European Union and other importers are keeping the option of similar curbs under review.

Governments accept there is no prospect of extending the quota system itself, not least because this would have to be agreed by all WTO members. ?That would open a Pandora's box. We must respect the current deal as a package,? said Domingos Mosca, an official at the Brazilian Textile Association.

Brazil, which exports only $2bn of an estimated $25bn in textile production this year, is not a major exporter. But in preparation for market liberalisation next year, several large Brazilian companies have set up shop in Central America and Mexico to target the US market, as well as in Germany to get a foothold in the European market.

Yet developing countries that stand to lose from the elimination of quotas want to keep the WTO spotlight on their plight.

Hence the proposal for a WTO study, sponsored by Bangladesh, the Dominican Republic, Fiji, Jamaica, Madagascar, Mauritius, Mongolia, Nepal, Sri Lanka and Uganda and backed by several others.

At the other end of the spectrum, beneficiaries such as China, India, and Pakistan, argue that more vulnerable producers would be better served by improved preferential arrangements with rich nations and help from international financial institutions.

? The WTO is set on Friday to approve $150m of trade sanctions against the US sought by the European Union and six other WTO members. The sanctions are in retaliation for US failure to repeal an anti-dumping law known as the Byrd amendment and judged illegal by the WTO.

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