RESTRICTED
WORLD TRADE WT/COMTD/W/17
11September 1996
ORGANIZATION(96-3521)
Committee onTrade andDevelopment Original: English
TEXTILES MONITORING BODY
Thefollowing submission hasbeenreceived fromtheTextiles Monitoring Body withtherequest
thatitbedistributed toWTO Members.
_______________________
Submission totheCommittee onTrade andDevelopment
TheTMB hasbeenrequested toprovide information ontheapplication andimplementation
ofthespecial provisions intheAgreement onTextiles andClothing (ATC) infavour ofdeveloping
country Members, andinparticular theleast-developed country Members. TheTMB willsubmit a
report totheCouncil forTrade inGoods inthecontext ofthepreparation fortheSingapore Ministerial
Conference. Thisreport willcover allaspects oftheimplementation oftheATC, including those which
areofparticular relevance todeveloping andleast-developed country Members.
Thepresent summary istheTMB’sspecific response totherequest from theCommittee on
Trade andDevelopment. Itisbased onnotifications received bytheTMB upuntilmid-July 1996. A
number ofprovisions examined below donothavemandatory notification requirements, therefore
information thatwould berelevant tothisexercise maynotbeavailable totheTMB.1
1. ATC provisions specific todeveloping country orleast-developed country Members
Article 1.2
Paragraph 2ofArticle 1andtherelated footnote statethattheprovisions ofparagraph 18of
Article 2andparagraph 6(b)ofArticle 6maybeused, totheextent possible, insuchawayastopermit
meaningful increases inaccess possibilities, aswellasthedevelopment ofcommercially significant
trading opportunities, forleast-developing country Members. Theextent towhich thisprovision has
beenapplied isreported intherelevant paragraphs below.
1Inaddition, bilateral consultations designed toimplement different provisions oftheATC mayalsohave
resulted inproviding favourable treatment orbeneficial effects todeveloping and/or least-developed country
Members.TheoutcomeofsuchconsultationsmayhavebeenincorporatedintonotificationsmadeunderArticles2
and3.WT/COMTD/W/17
Page2
Article 2.18
Paragraph 18ofArticle 2isprimarily intended toprovide improvement inaccess toexports
ofaspecific group ofcountries, asdefined intheparagraph. Totheextent thatleast-developed country
Members areconcerned theTMB hasnoted thatonlytheUnited States andCanada hadnotified
restrictions under Article 2.1vis-à-vis least-developed country Members, andthat:
(a) Canada notified restrictions onimports from Bangladesh, Lesotho andMyanmar.
Improvement inaccess inthesense ofparagraph 18ofArticle 2wasprovided with
respect toexports fromLesotho andMyanmar through theadvancement byonestage
ofthegrowth ratessetoutinparagraph 13ofArticle 2;
(b) theUnited States notified restrictions onimports fromBangladesh, HaitiandMyanmar.
Improvement inaccess inthesense ofparagraph 18ofArticle 2wasprovided with
respect toexports fromHaitithrough theadvancement byonestageofthegrowth rates
setoutinparagraph 13ofArticle 2.
Article 6.6(a)
SincenosafeguardactionhasbeennotifiedbyanyMemberagainstexportsofanyleast-developed
country Member during theperiod under review, thisparagraph, therefore, hasnotbeeninvoked.
Article 6.6(b)
Thisparagraph isapplicable toleast-developed country Members asenvisaged inparagraph 2
ofArticle 1,i.e.“totheextent possible ”.However, since nosafeguard action hasbeennotified by
anyMember against exports ofanyleast-developed country Member during theperiod under review,
thisparagraph hasnotbeeninvoked.
Article 6.6(c)
Nosafeguard action hasbeennotified under Article 6onexports ofwoolproducts fromwool-
producing developing country Members whose economy andtextile andclothing trade aredependent
onthewoolsector, whose totaltextile andclothing exports consist almost exclusively ofwoolproducts,
andwhose volume oftextile andclothing tradeiscomparatively small inthemarkets oftheimporting
Members. Thisparagraph has,therefore, notbeeninvoked.
Annex, paragraph 3(a)
Paragraph 3(a)oftheAnnex totheATC provides thatactions under thesafeguard provisions
inArticle 6ofthisAgreement shallnotapply todeveloping country Members 'exports ofhandloom
fabrics ofthecottage industry, orhand-made cottage industry products made ofsuchhandloom fabrics,
ortraditional folklore handicraft textile andclothing products, provided thatsuchproducts areproperly
certified under arrangements established between theMembers concerned. Inaccordance withthis
provision nosafeguard action under Article 6wasintroduced onsuchproducts.WT/COMTD/W/17
Page3
2. Provisions oftheATC which could beapplied insuch awayastoprovide favourable
treatment, ortobebeneficial, interalia,todeveloping country orleast-developed country
Members2
Inaddition totheprovisions specifically designed toprovide favourable treatment toexports
oftextile andclothing products fromdeveloping country orleast-developed country Members orboth,
theTMB hasidentified several provisions intheATC which, although notspecifically applicable only
tosuchMembers, could beapplied insuchawayastoprovide favourable treatment, ortobebeneficial,
interalia,tothem. TheTMB wasoftheviewthatanassessment oftheextent towhich developing
country orleast-developed country Members received favourable treatment orbenefited from the
application ofthese provisions would beuseful. Such provisions areconsidered below.
Article 1.4
Paragraph 4ofArticle 1provides that“theparticular interests ofthecotton-producing exporting
Members should, inconsultation withthem, bereflected intheimplementation oftheprovisions of
thisAgreement ”.TheTMB received nospecific notification under paragraph 4ofArticle 1related
totheimplementation ofthisprovision.
Articles 2.6and2.7(a)
Inreviewing thenotifications made pursuant toparagraphs 6and7(a)ofArticle 2theTMB
noted that,inaccordance withparagraph 6ofArticle 2,thevolume ofproducts integrated byCanada,
theEuropean Communities, Norway andtheUnited States amounted toatleast16percentofthetotal
volume ofimports oftheproducts falling under thecoverage oftheAgreement, including products
from each ofthefourgroups: topsandyarns, fabrics, made-up textile products, andclothing.
Notwithstanding theprovisions ofparagraphs 6and7ofArticle 2,theTMB wasaware that-with
theexception ofCanada affecting oneproduct -theproducts thusintegrated werenot,prior totheir
integration intoGATT 1994, subject toquantitative restrictions notified under paragraph 1ofArticle 2.
Articles 2.6and2.7(b)
TheTMB received forty-one notifications made pursuant toparagraphs 6and7(b)ofArticle 2,
andcompleted itsreview ofthirty-eight ofthem. Inthisreview theTMB noted thatinallcases the
products integrated amounted toatleast16percentoftotalimports oftheproducts falling under the
coverage oftheAgreement (inmostcases involume, insome others invalue), andthatinallcases
products fromeachofthefourgroups (topsandyarns, fabrics, made-up textile products, andclothing)
hadbeenintegrated.
TheTMB observed inthisconnection thatseven Members hadnotified theirchoice nottoretain
therighttousetheprovisions ofArticle 6andthatforthose Members theproducts falling under the
coverage oftheAgreement hadbeenintegrated intoGATT 1994 asfrom1January 1995. TheTMB
alsoobserved thatamong thefiftyMembers whohadchosen toretain therighttousetheprovisions
ofArticle 6,ninehadnotsubmitted anotification under paragraphs 6and7(b)ofArticle 2.
TheTMB noted thatinsome casesproducts integrated under paragraphs 6and7(b)ofArticle 2
hadalready beensubject toquantitative restrictions, notified under Article 3andjustified under any
2Provisions which could beapplied insuch awayastobebeneficial, inter alia,todeveloping and
least-developedcountryMembersarenotspecificallymeanttoprovidefavourabletreatmenttoanyoftheMembers.WT/COMTD/W/17
Page4
GATT 1994provision, andthatsuchrestrictions werenotaffected bytheintegration oftheproducts
concerned.
Article 2.15
Paragraph 15ofArticle 2states that“nothing inthisAgreement shallprevent aMember from
eliminatinganyrestrictionmaintainedpursuanttothisArticle,effectiveatthebeginningofanyagreement
yearduring thetransition period ”.TheTMB received anotification from Norway regarding the
elimination ofcertain restrictions withrespect tosome Members, witheffect asof1January 1996.
Thedeveloping country Members affected (Hong Kong, India, Indonesia, Korea, Macau, Malaysia,
Pakistan, thePhilippines, Romania, Singapore, SriLanka andThailand) hadbeeninformed inadvance
asrequired under theATC. TheTMB commended Norway fortheearly elimination ofsome ofits
restrictions maintained under thisAgreement.
Article 2.18
Paragraph 18ofArticle 2states that“asregards those Members whose exports aresubject
torestrictions onthedaybefore theentry intoforce oftheWTO Agreement andwhose restrictions
represent 1.2percentorlessofthetotalvolume oftherestrictions applied byanimporting Member
asof31December 1991 andnotified under thisArticle, meaningful improvement inaccess fortheir
exports shallbeprovided, attheentry intoforce oftheWTO Agreement andfortheduration ofthis
Agreement, through advancement byonestageofthegrowth ratessetoutinparagraph 13”,or“through
atleastequivalent changes asmaybemutually agreed withrespect toadifferent mixofbaselevels,
growth andflexibility provisions ”.
According tothenotifications made totheTMB bytherelevant Members, thefollowing
developing orleast-developed country Members correspond tosuchcriteria:
- forCanada: Costa Rica, Cuba, theDominican Republic, Jamaica, Lesotho, Macau,
Mauritius, Myanmar, South Africa, SriLanka, Swaziland andUruguay;
- fortheEuropean Communities: PeruandSriLanka;
- fortheUnited States: Bahrain, Colombia, Costa Rica, theDominican Republic, Egypt,
ElSalvador, Fiji,Guatemala, Haiti, Jamaica, Kenya, Kuwait, Macau, Mauritius, Qatar,
Romania, theUnited Arab Emirates andUruguay.
Thenotifications specified thatinallcases thisprovision hadbeenimplemented; thishadbeen
donethrough theadvancement byonestage ofthegrowth ratessetoutinparagraph 13ofArticle 2,
using different methodologies.
Article 3
TheTMB noted thatthemeasures notified byMembers suchastheEuropean Communities,
India andPakistan under paragraph 1ofArticle 3,Cyprus under paragraph 2(b)ofArticle 3,andthe
European Communities under paragraph 3ofArticle 3,contained elements oftradeliberalization from
which, interalia,developing orleastdeveloped country Members could benefit.
Article 6.6(b)
Paragraph 6(b)ofArticle 6envisages thatinsetting thelevelofarestraint, aswellasitspossible
growth rateandapplicable flexibility provisions, special andmore favourable treatment begiven toWT/COMTD/W/17
Page5
exports fromMembers whose totalvolume oftextile andclothing exports issmall incomparison with
thetotalvolume ofexports ofother Members andwhich account foronlyasmall percentage oftotal
imports ofthatproduct intotheimporting Member.
TheTMB received noinformation ontheextent towhich recourse wasmade tothisprovision
insetting theparameters oftherestraints ithadreviewed.
Article 6.6(d)
Paragraph6(d)ofArticle6statesthat“morefavourabletreatmentshallbeaccordedtore-imports
byaMember oftextile andclothing products which thatMember hasexported toanother Member
forprocessing andsubsequent reimportation, asdefined bythelawsandpractices oftheimporting
Member, andsubject tosatisfactory control andcertification procedures, when these products are
imported from aMember forwhich thistypeoftrade represents asignificant proportion ofitstotal
exports oftextiles andclothing ”.
Inreviewing therestraints agreed pursuant toparagraph 9ofArticle 6between theUnited States
andtheDominican Republic, Honduras, ElSalvador, Colombia (imports ofcotton andman-made fibre
underwear), Honduras (imports ofwomen ’sandgirls’woolcoats) andGuatemala (cotton andman-made
fibreskirts), theTMB noted thatmorefavourable treatment hadbeenprovided totheproducts envisaged
inparagraph 6(d)ofArticle 6.ThistooktheformofGuaranteed Access Levels (GALs), i.e.quantities
ofproducts ofacategory thataMember canexport totheUnited States provided theactual product
shipped qualifies forsuchtreatment, interalia,bybeing made of“UScomponents ”.When reviewing
suchagreed restraints, theTMB observed that,except forColombia, nogrowth ratewasprovided
forwithrespect toGALs. However, according toindications given bytheUnited States Government,
GALs canbeincreased onrequest. Therefore, itwastheTMB’sunderstanding that,upon request,
theGALs would beincreased bynolessthan6percentannually.
Articles 7.1and7.2
Atthepresent stagetheTMB doesnothavesufficient information thatwould enable ittomake
anassessment oftheextent towhich theMembers had,without prejudice totheirrights andobligations
under GATT 1994, taken suchactions asmaybenecessary toabide byGATT 1994rulesanddisciplines
soasto:
- achieve improved access tomarkets fortextile andclothing products through such
measuresastariffreductionsandbindings,reductionoreliminationofnon-tariffbarriers,
andfacilitation ofcustoms, administrative andlicensing formalities;
- ensure theapplication ofpolicies relating tofairandequitable trading conditions as
regards textiles andclothing insuchareas asdumping andanti-dumping rules and
procedures,subsidiesandcountervailingmeasures,andprotectionofintellectualproperty
rights; and
- avoid discrimination against imports inthetextile andclothing sector when taking
measures forgeneral trade policy reasons.
Asregardsthoseprovisions,includingparagraph1ofArticle7,forwhichsufficientinformation
isnotyetavailable, theTMB intends toprovide, initsreport tobesubmitted totheCouncil forTrade
inGoods, anassessment oftheirimplementation onthebasis ofinformation thatcanbegathered in
themeantime.