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Number 764, Fall 2004 by My Hanh Hoang |
Persian Rugs
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General Information
Legal Cluster Bio-Geographic Cluster Trade Cluster Environment Cluster Other Clusters |
|
Number 764, Fall 2004 by My Hanh Hoang |
Persian Rugs
|
General Information
Legal Cluster Bio-Geographic Cluster Trade Cluster Environment Cluster Other Clusters |
I. Identification1. The Issue
Woven
into the fabric of Iranian history, religion, society, and culture for more
than 2,500 years, Persian rugs are geographically integrated into Iran. When
a rug is made in Persia, it is synonymously linked with Iran - Persia and Iran
meaning the same thing when referring to rugs. 1 Intricately
tie with Iran's economy and trade for centuries, the hand-woven rugs are known
for their artistic beauty and quality, particularly rugs made during the Safavid
Dynasty (1499-1722). 2 Today, Persian rugs still maintain
their prestige. However, the trade has undergone dramatic changes with the introduction
of machination, synthetic dyes, and short cuts for weaving, changing how they
are traditionally made and undermining their quality and prestige. Deeply tied with Iran in every historical, societal, and cultural threads, Persian rugs has the potential to be a geographic indicator, causing additional tension to mount on the fabric of international trade. Further,
what trade impacts are there for Iran 's being a non-member of the World Trade
Organization? Last, now that the West focuses on Iran's nuclear capabilities,
how will that curtail Iran's access into international trade agreements? All
those issues are taken into consideration when examining the case study of Persian
rugs.
2. Description
The History
Carpet weaving was believed to be introduced by Cyrus the Great during his reign of the Persian Empire in 529 B.C. 3 They were made in villages for personal use with designs and weavings identifiable of the specific village or tribe. The artistic design and quality of Persian rugs reached its pinnacle during the Safavid Dynasty (1499-1722), because the reigns of Shah Tahmasp and Shah Abbas created a weaving industry that focused on "large-scale artistic and commercial enterprise revolving around highly skilled and organized weaving workshops." (Parviz Nemati, page 17) Royal workshops were established specifically for designers and weavers to work creating the best carpets with intricate designs, using silk with silver or gold thread for additional decoration. (Iran Chamber). Artists would create the carpet designs, and the best designs would be woven by the best weavers in the empire. The patronage of the shahs ensured the carpets were top-notched. During this time, trade was established with Europe with Persian rugs as one of the threads that spurred economic exchange, and Persia reached its golden age. The majority of the prized Persian rugs were made from during this time with the two greatest rugs wove in the mosque of Ardebil in 1539 (which are now located in Victoria and Albert Museum in London and the other one in Los Angeles County Museum).
The Safavid Dynasty, along with court-endorsed carpet making, ended with the Afghan invasion in 1722. Nader Khan became the Shah of Persia in 1736 but used his people to fight against the Turks, Afghans, and the Russian. Rug weaving survived with craftsmen in villages and nomads continuing to make carpets. However, the artistic designs and quality were not up to par as was in the Safavid period, and no high-valued carpets were woven during this period.
Toward the end of the 19th century, carpet weaving and trade flourished once again. Through trading via Istanbul, Americans and Europeans took an interest in Persian rugs and even established carpet businesses for rugs destined to the West. Today, carpet making is revived and wide-spread, due to the interest from Western countries, particularly Europe and the United States, with weaving made from workshops and in most Iranian homes.
What Makes Persian Rugs Unique?
"Iran is the genesis of most motifs, patterns and traditional colorations produced in rugs throughout the world today." Susie Beringer 4
The Victoria and Albert Museum in London brought a Persian carpet for 2, 500 British pounds in 1892, and it was deemed too expensive. Today, the "Ardebil Carpet" is well-known and is considered the best carpet on public display. In 1999, the famed auction house, Christie's London sold a Persian rug for more than $2 million. 5 Admittedly, those two examples are antique, Persian rugs made during the famed Safavid period; however, even Persian rugs made today are held in prestige. Why?
From the example of the basic rug design below, all rugs have specific characteristics, such as borders, selvage, field, etc. What distinguishes one rug from the other is the design; one unique aspect of the Persian rugs is their curvilinear designs. Curved-design weavings are much more difficult to execute than geometric ones.
Another unique quality of Persian rugs is their historical link. Of course, rugs made during the Safavid period are prized because of their unparallel quality and design. However, Persian rugs are still famed for their ties with its regional historical connection. Rugs are named for their designs, tribes, or locations of origin. For example, a rug made in Herat is termed a Herati. Rugs belonging to the Qasagai tribe are distinguished for their use of red and gold colors. 6 Rug weaving is strongly threaded to Iranian that there appears to be a rug named for every single city, tribe, or village of Iran. One can look at a rug and see the history of the weavers. For example, a tribal rug with woven trees state that this tribe was on the move and that rug's "centre is the tree of life and it joins the underworld to this world and to the heavens."
Last, what set a Persian rug from the others are the material and dye used, knot count, the design, and grade. Rugs made of silk or high quality wool are much more expensive than those made of cotton or materials of lesser quality. However, the rug shows better and lasts longer. Vegetable dyes do not run and ruin the rugs when washed or exposed to sunlight. Avoid aniline dyes but chrome dyes are fine since they do not run. With regard to knot count, the higher the knot counts per square inch in the warp, the higher the quality of the rug. (Count the knots on the back of the rug, not the front.) A silk Persian rugs may have more than 1,000 knots per square inch; of course, knot count does not matter when judging tribal or antique rugs since they are not as uniformed as the modern-made rugs. The Turkish-knot or Persian-knot is used to weave Persian rugs. As for design, the more complex the design, such as using curvilinear instead of geometric lines, the higher the rug's price. As for the rug grade, the higher it is evaluated, the more expensive the rug. Still, if the rug is hand-made, antique (particularly during the Safavid period), and well-maintained, the rug is guaranteed to be of high quality and, of course, valuable.
The Trade: Changes and Implications
3. Related Cases
Scotland
and China and Cashmere Trade Britain
produces the finest knits in the world using cashmere wool. With limited and
lower-grade cashmere output, imported wool from China has helped with the high
demand. However, China encroached "upon the domain of the British knitters
and rival the limits of wool produced globally." Britain reacted by raising
more goats to produce wool since it cannot rely on China to sell the same volume
as before, particularly when China makes a higher profit by knitting the products
domestically. Negative effects on the environment, particularly deforestation
and soil erosion, are briefly examined. Iran produces
85% of the world's saffron and exported a large quantity to Spain . Spain in
return re-exports Iranian saffron as its own. This case does not relate to Iran's carpet industry; however, it does provide that Iran does not belong to the
WTO and how it affects Iranian trades. Saffron
was used to make the yellow dye in carpets. American company RiceTec, Inc. was granted the United States's patent right to call its rice "Basmati" in 1997. India is challenging the United States for "violating on the Geographic Indication Act." India's argument is Basmati rice has a strong and long linkage to India's territory and culture for centuries. 4. Author and Date: My Hanh Hoang (November 18, 2004)
United States A tear in
the relationship between the United States and Iran occurred with the fall of
the Shah of Iran in 1979. Soon after, economic sanctions set the basis of United
States policy toward Iran when American diplomats were held hostages in Tehran. The Clinton Administration continued with additional sanctions due to “Iran's weapons of mass destruction, its support for terrorist groups, and its efforts
to subvert the Arab-Israeli peace process.” 7 Economic sanctions were imposed on Iranian products, which also included Persian rugs. Before 1979, the United States was the leading
importer of Persian rugs. With the sanctions, Persian rug trade was hurt with
rug-making not being as developed as before and led to competitors copying Persian
designs. However,
encouraged with Khatemi election, the United States eased some sanctioned imports
in 2000, such as Persian rugs, and even had then-President Clinton and Secretary
of State Albright attended Khatem's Millennium Summit speeches at the United
Nations. Tension
has since escalated since the discovery of two nuclear sites. In 2002, President
Bush declared Iran as an “axis of evil.” Congress soon followed with two resolutions,
S.Res.306 and H.Res.504 that did not support Iranian political leaders, which
signal the United States shift of support from Khatemi to reformists. No formal
dialogue between the two countries have since been established. Europe In June
2002, the Council of the European Union opened negotiations on political, trade,
and “co-operation agreement.” 8 World Trade Organization Iran applied
for WTO membership starting in September 1996, but the United States – along
with Israel - was, and still is, successful in opposing Iran's entry. 9 5. Discourse and Status:
In Progress
6. Forum and Scope:
Iran and Bilateral
7. Decision Breadth: Multiple: Iran, United States, European Countries, Japan
8. Legal Standing: Law
9. Geographic Locations
a. Geographic Domain: Middle
East
b. Geographic Site: Middle
East Asia
c. Geographic Impact: Iran
10. Sub-National
Factors: No
11. Type of Habitat:
Dry
12. Type of Measure: Tariff Export
Persian
rug trade is the "second major export-earner after oil" 10
comprising 12% of Iran 's non-oil export. Any export tariff affects the carpet
industry, particularly the weavers at the based level, because 14% of Iranians
depends on rug profits for their livelihood and because rug weaving is such
an integral custom in which it is not uncommon for non-weavers to weave on the
side for additional income and for many as their sole source of income.
In 1987
when the United States imposed economic embargo on Iran , the thirteen-year
trade lapse hurt Iran's carpet industry. 11 During those
time, rug competitors, such as India and China, copied Persian designs and
took away businesses from Iran . Rug quality and designs declined; thus, when
the embargo was lifted in 1990, Iran lost the grip it held on carpet export
to the United States. Today, 65% of Persian rugs are exported to Europe. 12
With the
current concern from the United States and Europe of nuclear power, trade in
Iran is “severely restricted” because of its designation as a “state sponsor
of terrorism.” 13 Iran's Persian rug trade is in a vulnerable
and delicate position with the probability that another trade embargo against
all Iran exports to the United States and Europe is likely. 13. Direct v. Indirect Impacts:
Direct Impact
14. Relation of Trade Measure to Environmental Impact
a. Directly Related to Product:
Yes - Rugs
b. Indirectly Related to
Product: No
c. Not Related to Product:
No
d. Related to Process: Yes-
Culture
Large production
of wool is needed to weave Persian carpets. Overgrazing and deforestation are
environmental problems Iran is facing.
15. Trade Product Identification:
Carpet
16. Economic Data:
For Iran,
carpet is the second largest export, next to oil products. Despite of its shaky
relationship with the United States, Iranian rugs leads in rugs imports into
America. Not even rugs from competing nations, such as India, Turkey, China,
or India, have the historical prestige as an authentic Persian rug. Despite
receiving imports of only $98.7 millions (of other products and with zero dollars
from carpet or floor coverings) from the United States, Iran still exported
$160.8 million worth of rugs into America in 2003. CONTINENTS WEIGHT VALUE SHARE 1 AGRICULTURAL PRODUCTS 762,858 669,171 22.207 2 MINE & MINERAL PRODUCTS 8,920,535 549,732 18.243 3 INDUSTRIAL PRODUCTS 3,321,140 969735 32.182 4 HAND-MADE CARPETS HANDICRAFTS 48,015 613,675 20.365 5 OTHERS 1,407,032 210,998 7.002 TOTAL 14459582 3013313 100.00% 17. Impact of Trade Restriction:
With competitors
cutting into Iran's Persian rug trade, Razi Miri, Carpet Exporters Union's
Board of Managers, “admitted that the situation in the global carpet market
has in recent years proceeded to the disadvantage of Iranians.” 18
Now Pakistan and China are benefiting from carpet with their low-cost rugs cutting
into Iran's. Currently, Iran's carpet trade's global is only 27%, less than
in previous years.
Still, “the carpet industry is a major foreign exchange earner and a vital sector in
Iran's fragile economic system, a slump in the industry would unleash unemployment
and cost the government hugely.” 18 18. Industry Sector: Carpet and Floor Covering (Textile)
19. Exporters and Importers:
Top Importers Reporter Value 1998 Value 1999 Value 2000 Value 2001 Value 2002 1,181,130 1,331,889 1,564,838 1,509,519 1,638,080 1,615,553 1,412,868 1,130,546 1,166,785 1,040,930 970,599 904,235 926,488 954,784 1,035,841 498,414 516,554 520,815 502,123 508,393 336,521 344,213 400,222 376,871 369,985 423,562 425,267 398,841 354,396 354,265 250,970 372,951 323,219 277,215 248,829 233,363 247,146 216,978 208,334 203,755 222,972 222,904 207,084 183,592 192,044 Top Exporters Value 1998 US$ ' 000 Value 1999 US$ 000 Value 2000 US$ '000 Value 2001 US$'000 Value 2002 US$ '000 2,205,197 2,133,942 2,016,835 1,941,350 2,038,359 833,301 777,862 796,495 715,661 689,223 605,111 731,890 706,512 601,951 625,103 759,611 661,331 566,344 569,118 620,087 615,258 695,041 649,126 583,774 616,115 442,611 423,229 476,006 496,090 561,195 504,424 478,612 409,000 439,904 438,148 404,836 384,041 375,233 353,251 327,843
20. Environmental
Problem Type: Culture
PART
1
Mohammad
Bairamzadeh has spent more than four months, eight hours each day, tying threads
into knots to painstakingly weave a rug. Once finished, the rug will measure
six and one half by ten feet, depicting hunters and animals. Mohammad has estimated
it will take another five months to finish this task. He has not woven this
carpet alone but has help from his wife and teenage son. When the
rug is done, Mohammad expects to sell the rug for $3,600. His wife believes
the price is too low for the labor, beauty, and quality of the rug. Competition
from domestic, machine-made carpet has made it increasingly difficult to sell
the carpet at a higher margin. However, Mohammad has confidence that the hand-made
carpets are superior to the machine-made ones. "Machine-made carpets wear
out sooner. If this one has a life of 20 years (referring to his carpet), that
one (referring to the machine-made one) has a life of 5 years. So our carpets
are better." 21 Still, he admits his livelihood
is hurt by the domestic, factory-made carpets and finds it is harder to sell
his rugs than before. Another
factor is the decline of foreign buyers. Most families from the countryside,
like Mohammad's, sell their rugs in a bazaar to foreigners. Lately, sells have
been weak; buyers are buying the synthetic, machine-made rugs or rugs hand-made
from competing countries. Weaving
carpets has been a part of Iranian history for more than 2, 500 years as a tradition
that passes down from one generation to the next. Mohammad taught his thirteen-years-old
son how to weave, like many families in Iran. With the decline in sell of Persian
rugs, some fear the youths will forsake this tradition to search for jobs in
the larger cities. This will hurt the small cities and, particularly, the small
villages who depend on selling the rugs to buy the necessities of life. PART
II “Iran regards
itself as the homeland of carpets;” 22 and for many Iranians,
a home without a Persian rug is “soulless.” 23 Rug weaving in Iran is an integral
part of their cultural tradition with families passing down the trade from generation
to generation for centuries. Weaving a rug is not just a necessity for Iranians
but also a form of expressing community, identity, and artistic creativity,
which Iranians proudly acknowledge. It is little wonder this tradition has gained
Persian rugs the reputation as the best of all rugs and has become a major industry,
second only to oil in the country. With approximately
14.6% of the population involves in the weaving of Persian rugs in some form
or another, a large portion of Iranians are dependent on the carpet industry.
This dependency placed many Iranians in a vulnerable position, where any market
upset will disrupt their lives. Persian carpet is the "second export earner,"
and "any recession in the carpet industry would unleash unemployment and
reduce incomes for the 10 million people engaged in the industry, not to mention
the loss of a considerable percentage of the country's foreign income."
24 In 1987,
the United States banned any Persian rugs from being imported into the country.
"During the embargo, copies of Persian rugs were made in other Asian and
Middle Eastern Countries." 25 Iran 's national carpet
company head, Mr. Mohammad Ali Karimi, acknowledged Iranian-patterned copies
from China and Turkey has eaten up a large portion of Iran 's market. He quoted
that Persian rug trade has dropped by 28% in 2003. 26
Commerce minister, Mr. Mohammad Shariatmadari, realized that 65% of India 's
rug export is Persian-patterned. Worse, machine-made
and partial man-made rugs weave in factories are cutting into the small cities
and villages' family businesses. Why pay more for a hand-made Persian rug (woven
from an Iranian family) when a factory-made (referring to the machine-made or
partial hand-made) one is less expensive? Similar arguments are made with Persian-patterned
rugs from competing countries. Mr. Shariatmadari acknowledges, and most Iranian
weavers know, is a thriving carpet market will create jobs and decrease immigration
from small villages into big cities. Iran needs the Persian carpet industry
to thrive for part of its traditional culture of passing the skills of carpet
weaving to the next generation.
21. Name, Type, and Diversity of Species: NA
22. Resource Impact
and Effect: Low and Product
23. Urgency and
Lifetime: Low and hundreds of years
24. Substitutes:
Like Products
25. Culture:
Yes
26. Trans-Boundary
Issues: No
27. Rights:
No
Potential for Future Problem with Geographic Indication
Most geographic indication-recognized products, particularly "wines and spirits"27 are from Europe. Developing countries are becoming aware that geographic indication products are great for inciting a higher revenue and as a marketing tool. The importance of GI is best stated below:
"Due to the fact that GIs are recognised, and not created; that they are linked to characteristics of a specific region, and that they are usually not reserved to a single producer, GIs offer interesting opportunities to particularly those parts of society that depend on agriculture, artisanal and craft work, or particular herbal products. As such, protection incentives could lead to the development of niche markets and small and medium-sized industries, specialising in the production and marketing of certain products." 27 Currently, Persian rugs are not geographic indication-protected products; however, the rug case fits the description above since many Iranian weavers are dependent on the sells of this product for their livelihoods and Persian rugs are already international-known as territorially belonging to Iran. Despite of the raise in awareness of "traditional knowledge" as determined by the Convention of Biological Diversity and the Bonn Guidelines, still little has been done to knot the guidelines tighter and make them effective. One interesting point that does arise when discussing protecting Persian rugs as a geographic indication product is instead of guarding the rugs, protect their designs or motifs. For now, what is certain is Persian rug is not a geographic indication-protected product. However, what may be in the future for Iran are the following two scenarios. One is if a developed country, for example like the United States, grants one of its own companies patent rights to Persian rugs. The case of Persian rugs may come into contest as similar to the Basmati rice case. However, Iran's relationship with the United States and European countries are not as cordial as India due to tension caused by Iran's quest to acquire nuclear energy. Not being a member of WTO may cause further problems for Iran. Another scenario may have the United States putting back in place economic sanctions on ALL Iran's products, including Persian rugs. The effects on rug export and Iranian weavers will be similar to those from 1979-2000. 28. Relevant Literature
1 Michael
Craig Hillman, Persian Carpets . (Austin: University of Texas Press,1984)
2 Parviz
Nemati, The Splendor of Antique Rugs and Tapestries . ( New York :
Rizzoli, 2001) 3 http://www.iranchamber.com/carpet/brief_history_persian_carpet.php
( 9/15/2004 ) 4 http://www.farsinet.com/persianrug/history.html
( 9/15/2004 ) 5 http://www.collectorsworld.org/topics/collections/item?item_id=4626
( 9/15/2004 ) 6 Karen
Von Rooyen, Sunday Times: Lifestyle and Leisure. "How to Put Heaven at
Your Feet": page 6. August 15, 2004 . 7 http://fpc.state.gov/documents/organization/20242.pdf
8 http://europa.eu.int/comm/trade/issues/bilateral/countries/iran/index_en.htm
9 http://www.american.edu/TED/saffron.htm
10 http://www.iccim.org/English/Magazine/iran_commerce/no_1999/24.htm 11 http://www.freep.com/money/consumer/guide22_20001022.htm 12 http://www.irvl.net/carpets.htm 13 http://www.washtimes.com/national/20040924-112900-7755r.htm
14 http://dataweb.usitc.gov/scripts/cy_m3_run.asp?Fl=m&Phase=HTS2&cc=5070&cn=Iran
17 http://www.iran-export.com/static/irexp.htm
18 http://www.iran-daily.com/1383/2084/html/focus.htm
19 http://www.intracen.org/menus/countries.htm 20 http://www.intracen.org/menus/countries.htm
21 http://www.commongroundradio.org/shows/04/0410.shtml
22 http://www.iranian.ws?iran_news/publish/article_3094.shtm
( 9/28/2004 ) 23 http://www.iranian.ws/cgi-bin/iran_news/exec/view.cgi/1/676
( 9/28/2004 ) 24 http://www.rugman.com/Library/Persian_Rugs.htm 25 http://www.freep.com/money/consumer/guide22_20001022.htm 26 http://www.Iranian.ws/iran_news/publish/article_3094.shtml 27 http://www.iprsonline.org/unctadictsd/dialogue/2004-11-08/2004-11-08_desc.htm
II. Legal Clusters
III. Geographic Clusters
IV. Trade ClustersTable One 14
US Imports for Consumption
at Customs Value from Iran
By Harmonized Tariff Schedule (HTS) Chapters , ranked by 2003 imports
2003 Ranking
HTS Category
2002
2003
2003
2003
2004
million dollarspercent of totalJan .- Aug.
million dollars
All categories$156.5$156.5$100.000$105.9$97.9
1
57. - carpets and other textile floor coverings
$122.9$129.7$80.667$85.1$79.3Table Two 15
US Imports for Consumption at Customs Value from Iran
For HTS Chapter 57.--CARPETS AND OTHER TEXTILE FLOOR COVERINGS, by HTS 4-digit categories , ranked by 2003 imports
2003 rank
HTS Category
2002
2003
2003
2004
thousand dollars
Percent of totalJan. - Aug.
thousand dollars
All categories
$122,923.1
$129,693.8
100.000
$85,068.6
$79,300.6
1
5701 - carpets and other textile floor coverings, knotted,
whether or not made-up
$114,890.8
$121,668.1
93.812
$80,054.7
$74,980.9
2
5702 - carpets and other textile floor coverings, woven, not
tufted or flockes, not including kelem, schumacks, karamanie and similar
hand-woven rugs
$7,799.0
$7,355.6
5.672
$4,749.3
$4,098.3
3
5705 - carpets and other textile floor coverings (whether
or not made-up), nesoi
$112.6
$545.7
0.0421
$171.9
$160.9
4
5703 - carpets and other textile floor coverings, tufted,
whether or not made-up
$98.4
$97.8
0.075
$68.6
$47.1
5
5704 - carpets and other textile floor coverings, of felt,
not tufted or flocked, whether or not made-up
$22.2
$26.6
0.021
$24.1
$13.3
Table Three 16
US Domestic Exports at FAS Value to Iran
For HTS Chapter 57.--CARPETS AND
OTHER TEXTILE FLOOR COVERINGS, by HTS 4-digit categories , ranked by 2003 exports
2003 rank
HTS Category
2002
2003
2003
2004
thousand dollarsPercent of totalJan. - Aug.
thousand dollars
All Categories
$0.0
$3.0
100.000
$3.0
$0.0
1
5703 - carpets and other textile floor coverings, tufted, whether or not
made-up
$0.0
$3.0
100.000
$3.0
$0.0
2
5701 - carpets and other textile floor coverings, knotted, whether or
not made-up
$0.0
$0.0
0.000
$0.0
$0.0
Table Four 17
Kg 1000
$US 1000
%
Table Five 19
Imports 1998-2002
Product group: 659 - FLOOR COVERINGS ETC.
US$ '000
US$ '000
US$ '000
US$ '000
US$ '000
Table Six 20
Exports 1998 - 2002
Product group: 659 - Floor Covering and etc.
Reporter
V. Environment Clusters
VI. Other Factors
