08/03/1999
The Wall Street Journal Europe

By Greg Rushford

SARAJEVO, Bosnia-Herzegovina -- Zejna Kasic is a Muslim refugee from Glavicine, a village in Bosnia some 53 kilometers southwest of Sarajevo. This dignified woman knits sweaters to support her nearly blind husband and a 19-year-old daughter, who is retarded. She is 51, Hillary Clinton's age, but looks a decade older. She doesn't ask for much -- just a decent job.

Ms. Kasic is one of 500-plus Bosnian women refugees who work for Bosnian Handicrafts, an organization launched in 1995 with the help of Norwegian foreign aid and financier George Soros's Open Society Institute. Rather than fostering a dependence on traditional aid, the project enables the women to fend for themselves, eking out a living making clothing, rugs and linens. But profits have been meager, and Bosnian Handicrafts would like to boost its fortunes by exporting its products to the huge markets of the European Union and the United States.

Unfortunately, Washington and Brussels are making this rather difficult.Bosnian Handicrafts has its share of problems at home. It must, for example, hand over 36% of its slim profits to the Bosnian government, which also levies an astounding 62% payroll tax on the organization. But the real threats to these women entrepreneurs lie in the restrictive quotas and high tariffs that Europe and the United States place on clothing imports. In the U.S., those tariffs are often higher than 30%; European textile protectionism is less odious, but still oppressive.

So long as the barriers to trade remain high, Bosnian Handicrafts will remain deprived of export markets. And that could mean that 500 Bosnian refugees will soon be out of work. Says Lejla Radoncic, Bosnian Handicrafts' project manager: "The only chance for the survival of this project is establishing links in foreign markets, especially the U.S. and Western Europe."The Bosnian women aren't the only ones in danger. From the war-torn Balkans to the poorest parts of Asia, Africa and Latin America, women like Ms. Kasic are trying to sew their way out of poverty.

It should follow that any serious advocate of women's rights would advocate eliminating the cruel tariffs and quotas imposed by governments in Europe and America.

Hillary Clinton, one powerful advocate of women's rights, was touched in May when she visited a refugee camp in Macedonia and learned that Liz Claiborne Inc. was considering curtailing its clothing operations there because of the disruption caused by NATO's bombing of Serbia. Mrs. Clinton called Paul Charron, Liz Claiborne's chairman, to persuaded him to remain in Macedonia.Not only did he agree, but he is giving the Macedonian factory (which manufactures Liz Claiborne clothes, but isn't owned by the U.S. company) enough fabric, thread and buttons to make roughly 240,000 shirts and trousers. The U.S. Agency for International Development is chipping in another $881,000 to pay for production costs at the factory. The clothing -- bearing the Liz Claiborne label -- will be donated to what will likely be the most stylishly dressed war refugees in history.

USAID and Liz Claiborne issued a joint press release touting Mrs. Clinton's and Mr. Charron's good deed. Harriet Babbitt, USAID's deputy administrator, proudly declared that the gesture would provide "tangible, short-term relief" for Macedonia.

That is an important statement. But what about long-term relief such as getting rid of those quotas and tariffs? Asked if the first lady would advocate abandoning these protectionist barriers, Mrs. Clinton's chief of staff, Melanne Verveer, explained that the first lady was "trying to make a simple gesture" to the Macedonians, but that she has not been involved in tariff issues. Perhaps, as Ms. Verveer argues, it is simply that "nobody" has suggested that Mrs. Clinton speak out about textile protectionism. But Mrs. Clinton, who is considering a run for the U.S. Senate in New York, may also be reluctant to ruffle the features of the (arch-protectionist) Union of Needletrades, Industrial and Textile Employees.

As for her husband's administration, nobody seems interested in an issue that has received so little public and press attention and yet could upset so powerful a domestic lobby were policy to change. Gene Sperling, who heads the White House's National Economic Council, did not respond to written questions on textile tariffs and reconstruction in the Balkans. Don Johnson, the U.S. Trade Office's chief textile negotiator, said through a spokeswoman, "This is not something that has crossed our radar screen."

Although Macedonia asked him six months ago to give the country some relief from U.S. quotas on wool, Mr. Johnson hasn't gotten around to that yet. He has indicated privately that he might be willing to give the Macedonians a break -- but only if they would buy their wool from U.S. producers. Actually, that idea doesn't come from Mr. Johnson, but from (no surprise here) the American Textile Manufacturers Institute. It makes no economic sense, but at least there is a political logic at work.

When I asked USAID whether the tariff issue had crossed their radar screen, spokeswoman Jessamyn Sarmiento answered, "We are involved in development and humanitarian issues," not tariffs. What about knitters who want real jobs, not charity? Ms. Sarmiento said I should try Mr. Johnson at the U.S. Trade Representative.The Europeans are little better. Ella Krucoff, the European Commission's spokeswoman in Washington, said that Europe wants to be helpful to Bosnia, Kosovo and Macedonia. But remember, she said, textiles "are sensitive." In Brussels, the spokesman for Leon Brittan, outgoing European trade commissioner, wouldn't take calls. While Mr. Brittan has asked the United States to get rid of its textile and clothing tariffs and quotas, it appears he doesn't agree that Europe should do the same.

Still, tariffs on clothing are lower in Europe than in America, and Europe is willing to give countries like Bosnia some tariff relief. For example, instead of being taxed at 13%, sweaters from Bosnia are subject to an 11% tariff. The EU also maintains a quota specifying that Bosnia can only sell some 2.5 million sweaters a year to Europeans. The Bosnians have to share that quota with Croatia. Some generosity.

Fortunately, not everyone is so cynical. Washington lawyer Jan Forest advises Bosnian Handicrafts on a pro bono basis. She says that her clients are in a tough spot, as clothing is excluded from the duty-free treatment the U.S. could offer developing countries under the Generalized System of Preferences program. In Sarajevo, Peggy Barry, a worker for Bosnian Handicrafts, has helped the women find niche outlets for their wares in the Washington, D.C. area.

Neither Ms. Forest nor Ms. Barry hid behind a spinmeister, nor thought to put out a press release advertising what they are doing to help women like Zejna Kasic. Perhaps they should, because they are doing a lot more than the PR-savvy politicians in Washington and Brussels.

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