RESTRICTED
WORLD TRADE G/L/40
23November 1995
ORGANIZATION(95-3689)
Textiles Monitoring Body
REPORT (1995) OFTHE TEXTILES MONITORING BODY
1. TheTextiles Monitoring Body (TMB) wasestablished inorder tosupervise theimplementation
oftheWTO Agreement onTextiles andClothing (ATC), toexamine allmeasures taken under its
provisions andtheirconformity therewith, andtotaketheactions specifically required ofitbythat
Agreement.
2. Thecomposition oftheTMB forthefirststageofimplementation oftheAgreement (1995-1997)
wasdecided bytheGeneral Council on31January 1995 (WT/L/26); Ambassador András Szepesi
wasappointed Chairman oftheTMB forthesame period. ThelistofTMB members andalternates
iscontained inparagraph 2ofG/TMB/R/1. Subsequent changes arenoted inparagraphs 2of
G/TMB/R/3 andofG/TMB/R/5.
3. From theentry intoforce oftheAgreement establishing theWTO until17November 1995,
theTMB heldseven formal meetings. Thefirstmeeting consisted ofseven sessions on8-9and
23-24 March, 10-11 April, 15-19 May, 7-9June, 4-6and12-13 July. Thesecond meeting washeld
on13-15 and17-21 July,thethirdon28August to1September, thefourth on12-15 September, the
fifthon25-28 September, thesixthon16-20 October andtheseventh on13-17 November. Reports
ofthemeetings arecontained inG/TMB/R/1 to5.Thereport oftheseventh meeting willbecirculated
when adopted bytheTMB. TheTMB’sfindings, observations orrecommendations werecirculated
shortly aftertheiradoption bytheTMB innotes prepared bytheChairman (G/TMB/1 to5).
4. Attheconclusion ofitsfirstmeeting on13JulytheTMB adopted itsworking procedures,
inaccordance withparagraph 2ofArticle 8oftheATC (G/TMB/R/1, Annex).
5. TheTMB received notifications under various articles oftheATC. TheTMB agreed atits
firstmeeting thatnotifications received pursuant toArticles 2.1,2.2,2.7(a)and(b),2.8(a)and(b),
2.10, 2.11, 2.15, 3.1,3.4,6.1and7.2oftheAgreement would becirculated toWTO Members without
delay, itbeing understood thattheTMB could examine orreview these notifications atalaterstage
(G/TMB/R/1, Annex, paragraph 4.2(a)). Suchnotifications arecontained indocuments G/TMB/N/1
to131. Thenotifications examined orreviewed bytheTMB during theperiod considered arelisted
below.
Notifications under Article 2.1:quantitative restrictions within bilateral agreements maintained under
Article 4ornotified under Article 7or8oftheMFA inforce onthedaybefore theentry intoforce
oftheATC
6. TheTMB completed itsreview ofthenotifications received under thisprovision from the
EuropeanCommunities(G/TMB/N/60andAdds.1&2),Norway(G/TMB/N/61),Canada(G/TMB/N/62
andAdd1),andtheUnited States (G/TMB/N/63, Adds. 1to4,andCorr. 1).G/L/40
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Notifications under Article 2.2: observations withregard tonotifications made under Article 2.1
7. TheTMB completed itsreview ofthenotifications made byColombia (G/TMB/N/105),
Hong Kong (G/TMB/N/106) andKorea (G/TMB/N/120). Itnoted thattheobservations made inthese
notifications hadbeentaken intoaccount intheCorrigendum orAddenda tothenotifications made
under paragraph 1ofArticle 2bytheWTO Members concerned. TheTMB decided torevert toits
review ofthenotification made byMacau (G/TMB/N/108) atalaterstage.
Notifications under Articles 2.6and2.7(a): firststage ofintegration intoGATT 1994 ofproducts
covered bytheATC byMembers maintaining restrictions falling under paragraph 1ofArticle 2
8. TheTMB began itsreview ofthenotifications made bytheEuropean Communities, Canada,
NorwayandtheUnitedStates(G/TMB/N/1to5,includingAddendaandCorrigenda)atitssixthmeeting
and,havingsoughtandreceivedfurtherinformationandclarification(G/TMB/R/5,paragraph5)finalized
itatitsseventh meeting.
Notifications under Articles 2.6and2.7(b): firststage ofintegration intoGATT 1994 ofproducts
covered bytheATC byMembers which have, pursuant toArticle 6.1,retained therighttousethe
provisions ofArticle 6
9. TheTMB reviewed thenotifications made byThailand, Turkey, Mexico, Korea, Brazil,
ElSalvador, Venezuela, Colombia, theCzech Republic, Peru, Costa Rica, Indonesia, Slovenia and
Bangladesh. Itbegan itsreview ofthenotifications made byJapan, Guatemala, Nicaragua, the
Dominican Republic, Uruguay, India, Switzerland, Argentina, Poland, thePhilippines, Paraguay,
Romania, Pakistan, Honduras, Hungary, theSlovak Republic, Malaysia, Bolivia andTunisia.
Notifications under Article 2.15: elimination ofrestrictions maintained pursuant toArticle 2
10. TheTMB reviewed thenotification made byNorway (G/TMB/N/130). TheTMB commended
Norway fortheearly elimination ofsome ofitsrestrictions maintained under thisAgreement.
Notifications under Article 3.1:restrictions ontextiles andclothing products (other thanrestrictions
maintained under theMFA andcovered bytheprovisions ofArticle 2),whether consistent with
GATT 1994 ornot
11. TheTMB began consideration ofthenotifications made under thisprovision atitssixthmeeting.
Ittooknoteofsome notifications and,having sought further information andclarification, decided
torevert totheconsideration oftheother notifications atalaterstage(G/TMB/R/5, paragraphs 6to9).
TheTMB noted thatithadreceived noreverse notification under paragraph 4ofthatArticle.
Notifications under Article 6.1: Members notmaintaining restrictions under Article 2oftheATC
andwishing ornottoretain therighttousetheprovisions ofArticle 6
12. TheTMB tooknoteofthenotifications made under Article 6.1bythefollowing WTO Members
thattheywished toretain therighttousetheprovisions ofArticle 6:Japan, ElSalvador, Honduras,
Colombia, Uruguay, Thailand, Guatemala, Nicaragua, Argentina, Brazil, Dominican Republic, Turkey,
Mexico, Korea, India, Switzerland, SriLanka, Bangladesh, Poland, Egypt, Costa Rica, Philippines,
Venezuela,Peru,Paraguay,Mauritius,Jamaica,Romania,Malaysia,Hungary,Pakistan,CzechRepublic,
Slovak Republic, Slovenia, Israel, Zambia, Indonesia, Kenya, Bolivia, South Africa, Malta, Trinidad
andTobago, Myanmar, Cyprus, Morocco, Senegal, Lesotho, Côted’Ivoire andTunisia. TheTMB
alsotooknoteofthenotifications made bythefollowing WTO Members thattheydidnotwishtoretainG/L/40
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therighttousetheprovisions ofArticle 6:Hong Kong, Macau, Singapore, Cuba, NewZealand and
Chile.
Notifications under Article 6.10: transitional safeguard actions referred totheTMB
13. TheTMB reviewed notifications made bytheUnited States ofitssafeguard actions onimports
ofthefollowing products:1
(a) cottonandman-madefibrepyjamasandothernightwear(UScategory351/651)imported
from Honduras (G/TMB/R/2, paragraphs 20to27);
(b) cottonandman-madefibreunderwear(UScategory352/652)importedfromCostaRica,
Honduras, Thailand andTurkey (G/TMB/R/2, paragraphs 5to19);
(c) men’sandboys’woolcoatsotherthansuit-type (UScategory 434)imported fromIndia
(G/TMB/R/3, paragraphs 6to12);
(d) women ’sandgirls’woolcoats (UScategory 435)imported fromIndia (G/TMB/R/3,
paragraphs 13to19)andHonduras (G/TMB/R/3, paragraphs 27to32);
(e) woven woolshirts andblouses (UScategory 440)imported fromIndia (G/TMB/R/3,
paragraphs 20to26)andHong Kong (G/TMB/R/4, paragraphs 4to8).
Inthecourse ofitsexamination, theTMB heard presentations bytheparties involved.
Notification under Articles 8.5and8.6
14. TheTMB began thereview ofanotification made byThailand onaquestion ofprinciple raised
inthecontext ofthesafeguard action introduced bytheUnited States onimports ofcotton andman-made
fibreunderwear (UScategory 352/652) (G/TMB/R/2, paragraphs 28to33,andparagraph 13(b) above).
Notification under Article 8.6
15. Following theTMB’sconclusions made atitsfourth meeting onthesafeguard action taken
bytheUnited States onimports ofwomen ’sandgirls’wool coats (UScategory 435)from India
(G/TMB/R/3, paragraph 19,andparagraph 13(d) above), India referred thismatter totheTMB.
TheBodyreviewedthismatteratitsseventhmeeting;itcouldnotmakeanyrecommendationinaddition
totheconclusions ithadreached on12-15 September 1995, norcould itreach aconsensus onwhether
ornottherestraint oncategory 435could continue tobemaintained inlightoftheabsence ofconsensus
ontheexistence ofactual threat ofserious damage. TheTMB therefore considered itsreview ofthe
matter under therelevant provisions oftheATC completed (G/TMB/5, paragraph 3).
Notifications under Article 8.10
16. Following theTMB recommendation made atitssecond meeting onthesafeguard action taken
bytheUnited States onimports ofcotton andman-made fibre pyjamas andother nightwear
(UScategory 351/651) from Honduras (G/TMB/R/2 paragraph 27,andparagraph 13(a) above), the
United States informed theTMB thatthisrecommendation wasstillunder active consideration. During
1Theoutcome oftheTMB reviews iscontained intheAnnex.G/L/40
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itsfourth meeting, theTMB wasinformed andtooknoteofthedecision bytheUnited States torescind
themeasure (G/TMB/R/3, paragraph 33).
17. Following thefinding made bytheTMB atitsfourth meeting onthesafeguard action taken
bytheUnited States onimports ofwoven wool shirts andblouses (UScategory 440)from India
(G/TMB/R/3, paragraph 26,andparagraph 13(e) above), India informed theTMB thatitcould not
conform withthisrecommendation. TheTMB reviewed thismatter atitseventh meeting; itcould
notmake anyrecommendation inaddition totheconclusions ithadreached atitsmeeting on
12-15 September 1995. TheTMB therefore considered itsreview ofthematter completed (G/TMB/5,
paragraph 4).
Follow-up ofTMB recommendations
18. TheTMB wasinformed byboththeUnited States andHonduras that,following theTMB
recommendation made atitssecond meeting onthesafeguard action theUnited States hadtaken on
imports ofcotton andman-made fibreunderwear (UScategory 352/652) fromHonduras (G/TMB/R/2,
paragraphs 16and17,andparagraph 13(b) above), theyhadheldconsultations without reaching a
common position. Atitsfourth meeting theBody wasinformed thatbothparties hadarrived ata
mutually agreeable resolution ofthisissueunder paragraph 9ofArticle 6(G/TMB/R/3, paragraph 34).
19. TheTMBreceivedreportsfromboththeUnitedStatesandCostaRicaexplainingthat,following
theTMB recommendation made atitssecond meeting onthesafeguard action taken bytheUnited States
onimports ofcotton andman-made fibre underwear (UScategory 352/652) from Costa Rica
(G/TMB/R/2, paragraphs 16and17,andparagraph 13(b) above), ithadnotbeenpossible toreach
amutually agreeable resolution oftheissue. TheTMB examined these reports atitssixthmeeting.
Itsdiscussions confirmed theBody'sprevious findings inthismatter (G/TMB/R/2, firsttwosentences
ofparagraph 16). There being nofurther requests bytheparties involved, theTMB considered its
review ofthematter completed (G/TMB/R/5, paragraph 10).G/L/40
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ANNEX
OUTCOME OFTMB REVIEW OFNOTIFICATIONS RECEIVED UNDER
PARAGRAPH 10OFARTICLE 6
United States/Honduras: imports ofcotton and man-made fibre pyjamas and other
nightwear (UScategory 351/651)
TheTMB found thatacaseofserious damage, oractual threat thereof, hadnotbeendemonstrated
andrecommended thattheUnited States rescind themeasure.
United States/Costa Rica, Honduras, Thailand andTurkey: imports ofcotton andman-made
fibre underwear (UScategory 352/652)
United States/Costa RicaandHonduras
Duringitsreviewunderparagraphs2and3ofArticle6ofthesafeguardactiontakenbytheUnitedStates
againstimportsofcategory352/652fromCostaRicaandHonduras,theTMBfoundthatseriousdamage,
asenvisaged inthese provisions, hadnotbeendemonstrated. TheTMB could not,however, reach
consensus ontheexistence ofactual threat ofserious damage. TheTMB recommended thatfurther
consultations beheldbetween theUnited States andtheparties concerned, withaviewtoarriving at
amutual understanding, bearing inmindtheabove, andwithdueconsideration totheparticular features
ofthiscase, aswellasequity considerations.
These consultations shallbeheldconsistent withtheAgreement onTextiles andClothing, inparticular
withitsArticles 6and4,andbeconcluded within 30days. Parties shallreport totheTMB onthe
outcome ofsuchconsultations nolaterthanattheendofthatperiod.
TheTMB noted that,withrespect totheintroduction ofasafeguard measure, theAgreement onTextiles
andClothing doesnotprovide anyindication withrespect totheeffective dateofimplementation of
thatmeasure.
United States/Thailand
While starting theexamination oftherequest submitted byThailand inthecontext ofthesafeguard
action introduced bytheUnited States onimports ofcategory 352/652 from Thailand theTMB was
informed thattheUnited States haddecided torescind thissafeguard measure against Thailand.
United States/Turkey
During thereview, theTMB wasinformed thattheUnited States andTurkey hadarrived atamutually
agreeable resolution oftheissue under paragraph 9ofArticle 6.
United States/India: imports ofmen’sandboys’woolcoats other thansuit-type (UScategory 434)
During itsreview under paragraphs 2and3ofArticle 6,ofthesafeguard action taken bythe
United States against imports ofcategory 434fromIndia, theTMB, having examined allinformation
provided bybothparties, found thatserious damage, oractual threat thereof, hadnotbeendemonstrated,
andrecommended thattheUnited States rescind themeasure.G/L/40
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United States/India: imports ofwomen ’sandgirls’wool coats (UScategory 435)
During itsreview under paragraphs 2and3ofArticle 6,ofthesafeguard action taken bythe
United States against imports ofcategory 435from India, theTMB found thatserious damage, as
envisaged inthese provisions, hadnotbeen demonstrated. TheTMB could not,however, reach
consensus ontheexistence ofactual threat ofserious damage. When reviewing theimplications of
thediscussions intheTMB andtheBody’sfinding inthismatter, theparties should keepinmind the
factthattheAgreement issilent astowhether theimport restraint cancontinue tobemaintained.
United States/Honduras: imports ofwomen ’sandgirls’wool coats (UScategory 435)
After thepresentation oftheirarguments, theparties informed theTMB thattheyhaddecided toresume
bilateral consultations, andasked forsuspension oftheconsideration ofthisissue bytheTMB. The
BodywasinformedsubsequentlythattheUnitedStatesandHondurashadarrivedatamutuallyagreeable
resolution oftheissue under paragraph 9ofArticle 6.
United States/India: imports ofwoven wool shirts andblouses (UScategory 440)
During itsreview under paragraphs 2and3ofArticle 6,ofthesafeguard action taken bythe
United States against imports ofcategory 440fromIndia, theTMB found thattheactual threat ofserious
damage hadbeendemonstrated, andthat,pursuant toparagraph 4ofArticle 6,thisactual threat could
beattributed tothesharp andsubstantial increase inimports from India.
United States/Hong Kong: imports ofwoven wool shirts andblouses (UScategory 440)
After having heard thepresentation bybothparties, theTMB, keeping inmind therelevant provisions
oftheATC, reached thefollowing conclusions:
1. Inreviewing thisnotification, andhaving considered thearguments putforward bytheparties,
theTMB noted thatHong Kong exports ofproducts ofcategory 440intotheUSwerealready under
restraint under agroup limitnotified bytheUSinaccordance withparagraph 1ofArticle 2ofthe
Agreement.2
2. TheTMB found that,according toparagraph 4ofArticle 6,theapplication ofasafeguard
measure under thisArticle toHong Kong exports ofproducts ofcategory 440intotheUSwastherefore
notjustified, andrecommended thattheUSrescind themeasure.
2G/TMB/N/63.