WORLD TRADE G/TMB/N/271
22July1997
ORGANIZATION(97-2992)
Original: English Textiles Monitoring Body
AGREEMENT ONTEXTILES AND CLOTHING
Notification under Article 2.17
UNITED STATES
Administrative Arrangements withGuatemala
TheTextiles Monitoring Body hasreceived anotification fromtheUnited States pursuant to
paragraph 17ofArticle 2.TheTMB iscirculating thisnotification toWTO Members fortheir
information.G/TMB/N/271
Page2
Executive Office ofthePresident
Office oftheUnited States Trade Representative
Geneva
21March 1996
TheHonourable
Ambassador András Szepesi
Chairman, Textiles Monitoring Body
World Trade Organization
RuedeLausanne 154
1211 Geneva
Dear Ambassador Szepesi,
AttachedyouwillfindmyGovernment'snotificationofAdministrativeArrangementsforEgypt,
Guatemala1,theDominican Republic andTurkey made pursuant toArticle 2.17oftheAgreement on
Textiles andClothing.
Sincerely,
(Signed) William Tagliani
Attaché
1Thisdocument contains theAdministrative Arrangements withGuatemala. Administrative Arrangements
concluded withtheother Members mentioned above willbecirculated asseparate documents.
Note: Annexes BandCreferred tointhetextcontain thelistofrestrictions notified bytheUnited States pursuant
toArticle 2.1andassuch arenotpartoftheAdministrative Arrangements.G/TMB/N/271
Page3
GUATEMALA
Thefollowing provisions aredrawn fromtheUnited States -Guatemala Bilateral Textile and
Apparel Agreement of20July1993andtheMemoranda ofUnderstanding of3March 1995andhave
beenagreed bytheUnited States andGuatemala tobenecessary fortheproper implementation of
restrictions notified totheTextiles Monitoring Body under Article 2.1oftheAgreement onTextiles
andClothing.
Coverage ofAgreement andClassification
2. Thetextiles andtextile products covered bythisAgreement arethose summarized in
paragraph 3(D), assubject toamendment. Thesystem ofcategories andtheratesofconversion into
square metres equivalent (SME) listed inparagraph 3(D), assubject toamendment, shallapply in
implementing thisAgreement.
3.(A) Tops, yarns, piece goods, made-up articles, garments, andother textile manufactured products
(being products which derive theirchiefcharacteristics fromtheirtextile components) ofcotton,
wool, man-made fibres orblends thereof, inwhich anyorallofthese fibres incombination
represent thechief weight oftheproduct, aresubject tothisAgreement. Components ofan
article which arenotconsidered relevant totheclassification under thegeneral rules of
interpretation orthelegalnotes toSection XIoftheHarmonized System arelikewise tobe
disregarded here.
(B) Forthepurposes ofthisAgreement, textile products covered bysub-paragraph (A)above shall
beclassified as:
(I) Man-made fibretextiles, iftheproduct isinchiefweight ofman-made fibres, unless:
(a) Theproduct isknitted orcrocheted apparel inwhich wool equals orexceeds
23percentbyweight ofallfibres, inwhich casetheproduct willbeawool
textile; or
(b) Theproduct isapparel, notknitted orcrocheted, inwhich wool equals or
exceeds 36percentbyweight ofallfibres; inwhich casetheproduct will
beawool textile; or
(c) Theproduct isawoven fabric inwhich wool equals orexceeds 36percent
byweight ofallfibres, inwhich casetheproduct willbeawool textile.
(II) Cotton textiles, ifnotcovered by(I)andiftheproduct isinchief weight ofcotton,
unless theproduct isawoven fabric inwhich wool equals orexceeds 36percentby
weight ofallfibres, inwhich casetheproduct willbeawool textile.
(III) Wool textiles, ifneither oftheforegoing applies, andtheproduct isinchief weight
ofwool.
(C) Coverage under thisparagraph isintended tobeidentical withtheterms oftheArrangement
andinconformance withthe31July1986 Protocol ofExtension. Intheevent ofaquestion
regarding whether aproduct iscovered bythisAgreement byvirtue ofbeing inchiefweight
ofcotton, wool, orman-made fibre, thechief value ofthefibres maybeconsidered.G/TMB/N/271
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(D) Forthepurposes ofthisAgreement, thefollowing categories, asdefined below, arecovered
bythisAgreement. Ifbothcountries agree toputnewcategories under quota, bothparties
shallamend thisparagraph oftheAgreement andtheVisaArrangement asnecessary toinclude
additional categories.
Merged Categories andConversion Factors
Category DescriptionAgreement
DesignationConversion
Factor
340 Men's&boys'cotton shirts,
notknit340/640 20.1
347 Men's&boys'cotton
trousers/slacks/shorts347/348 14.9
348 Women 's&girls'cotton
trousers/slacks/shorts347/348 14.9
351 Cotton nightwear &pyjamas 351/651 43.5
443 Men's&boys'wool suits N/A 3.76
448 Women 's&girls'wool
trousers/slacks/shortsN/A 15.0
640 Men's&boys'MMF shirts,
notknit340/640 20.1
651 MMF nightwear &pyjamas 351/651 43.5
Guaranteed Access Levels (GAL)
6.(A) Theproducts andthecategories listed asGALs inAnnex Carethose which theGovernment
ofGuatemala intends toexport totheUnited States ofAmerica under theCaribbean Basin
Textile Special Access Programme. These products, which willbe:
- assembled inGuatemala ofUS-formed fabrics, cutintheUnited States of
America forre-export totheUnited States under contracts governed by
HTSUSA 9802.00.8015 or
- assembled inGuatemala ofUS-formed fabrics, cutintheUnited States and
thensubject tobleaching, acidwashing, stonewashing, garment dyeing, or
permapressing inGuatemala following assembly, forre-export tothe
United States ofAmerica under contracts governed bythestatistical headnote
under chapters 61and62oftheHarmonized Tariff Schedule ofthe
United States ofAmerica annotated, asimplemented bytheGovernment of
theUnited States ofAmerica requiring theuseofthestatistical prefix "H"are
subject totheannual Guaranteed Access Levels specified inAnnex C.
(B) IftheGovernment ofGuatemala wishes toapply foranewGuaranteed Access Level orto
exporttextileproductstotheUnitedStatesofAmericaundertheCaribbeanBasinTextileSpecial
Access Programme inexcess oftheexisting GAL, theGovernment ofGuatemala shallsubmit
arequest foraneworincreased level. TheGovernment oftheUnited States ofAmerica shall
consider sucharequest sympathetically andrespond promptly within 30USworking daysofG/TMB/N/271
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thereceipt bytheGovernment oftheUnited States ofAmerica inWashington oftheinitial
request. Among other factors, theGovernment oftheUnited States ofAmerica willtakeinto
consideration export performance, current newinvestment, andthepotential formarket
disruption, taking intoaccount theUScontent oftheproduct.
(C) IftheGovernment oftheUnited States ofAmerica failstoreply within 30USworking days,
therequest oftheGovernment ofGuatemala becomes thenewGuaranteed Access Level. If
theGovernment oftheUnited States ofAmerica isunable tocomply fullywiththerequest
duetoproblems ofmarket disruption, asdescribed inAnnex AoftheArrangement, orthe
realriskthereof, inthecategory orproduct subject tosuchrequest, theGovernment ofthe
United States ofAmerica willsoinform theGovernment ofGuatemala within 30USworking
days. Inthiscase, untilamutually satisfactory change intheGAL inquestion isestablished,
shipments shallnotexceed theexisting GAL. TheUnited States ofAmerica 'sresponse will
besupported bydatawhich form thebasis oftheposition ithastaken. Either Government
mayrequest consultations todiscuss suchrequest forincreases inGALs.
Flexibility Adjustments
8.(A) TheSpecific Limits setoutinAnnex Bdonotinclude anyadjustments permitted under
paragraph 8.
(B) During anyagreement period, theSpecific Limits setoutinAnnex Bmaybeincreased by
notmore thanseven percentswing provided thatacorresponding reduction insquare metres
equivalent ismade inoneormore other Specific Limits during thesame agreement period.
(C) NoSpecific Limit maybedecreased pursuant toparagraph 8(B)toalevel which isbelow
thelevelofexports charged against thatcategory 'slimitforthatagreement period.
(D) TheGovernment ofGuatemala shallindicate totheGovernment oftheUnited States theSpecific
Limits itwould likeincreased andthose which itwould likedecreased bycommensurate
quantities insquare metres equivalent.
(Carryover andCarry Forward)
9.(A) Theextent towhich anySpecific Limit setoutinAnnex Bmaybeexceeded inanyagreement
period bycarry forward (borrowing aportion ofthecorresponding Specific Limit from the
succeeding agreement period) and/or carryover (theuseofanyunused meterage (shortfall)
ofthecorresponding Specific Limit fortheprevious agreement period) is11percent,ofwhich
carry forward shallnotconstitute more than6percent.
(B) Carryover andcarry forward willbeavailable forcategories previously covered under
Memoranda ofUnderstanding dated 28October 1989; 30June1992; 30October 1992and
14December 1992. Nocarry forward shallbeavailable forapplication inthefinalagreement
period.
(C) Forthepurposes oftheAgreement, ashortfall occurs when exports oftextiles ortextile products
ofGuatemala totheUnited States ofAmerica during anyagreement period arebelow any
Specific Limit assetoutinAnnex B(or,inthecaseofanylimitdecreased pursuant toparagraph
8or9,when suchexports arebelow thelimitasdecreased).
(D) TheGovernment ofGuatemala willnotify theGovernment oftheUnited States ofAmerica
when itwishes touseunused meterage (shortfall) available incategories forcarryover, orforG/TMB/N/271
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usebyother categories forswing, subject totheprovisions setoutabove. However, the
Government oftheUnited States ofAmerica maysupply adjustments under thissection toany
Specific Limit whenever thatadjustment appears appropriate tofacilitate theflowoftradeand
thesound administration oftheAgreement. Totheextent thatsuchadjustments areactually
utilized, theywillbeimplemented bymeans ofcarryover andcarry forward, inthatorder.
Anunused carry forward willbere-credited tothefollowing period 'slimit. Thisprocedure
willnotprejudice theoutcome ofanyconsultations thatmaybeheldbetween ourgovernments
concerning theamounts ofavailable carryover andcarry forward.
Overshipment Charges
11.(A) Products ofGuatemala shipped inexcess ofauthorized limits inanyagreement period may
bedenied entry intotheUnited States ofAmerica. Anysuchshipment denied entry maybe
permitted intotheUnited States ofAmerica andcharged totheapplicable limitinthesucceeding
agreement period.
(B) Products ofGuatemala shipped inexcess ofapplicable limits inanyagreement period will,
ifallowed entry intotheUnited States ofAmerica during thatagreement period, becharged
totheapplicable limitinthesucceeding agreement period.
(C) TheGovernment oftheUnited States ofAmerica shallinform theGovernment ofGuatemala
ofanycharges assoonaspossible.
(D) Anyaction taken pursuant tosub-paragraph 11(A) and11(B) above, willnotprejudice therights
oftheother sideregarding consultations.
Spacing Provisions
12. TheGovernment ofGuatemala shalluseitsbestefforts tospace exports ofitsproducts tothe
United states ofAmerica within eachcategory evenly throughout eachagreement period, taking into
consideration normal seasonal factors.
USAssistance inImplementation oftheLimitation Provisions
13. TheGovernment ofGuatemala shalladminister itsexport control system under theAgreement.
TheGovernment oftheUnited States ofAmerica mayassist theGovernment ofGuatemala in
implementing thelimitation provisions ofthisAgreement bycontrolling, bydateofexport, imports
oftextiles andtextile products covered bythisAgreement.G/TMB/N/271
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Correct Category/Quantity VisaSystem
14.(A) Theprovisions oftheVisaArrangement willgovern thelicensing and/or certification ofexports
from Guatemala. Visas issued inaparticular agreement yearshallbevalid onlyfortextile
andapparel products exported during thatagreement year.
(B) Theparties recognize thatunder theAgreement thepurchase oftextiles andtextile products
tobedelivered subject totherestrictions under theAgreement implies thatthedelivery ofgoods
willbeaccompanied byavalid visa.
Commercial Samples andPersonal Shipments
15. Properly marked commercial sample shipments, valued at$250.00 orless,anditems forthe
personal useoftheimporter andnotforre-sale, regardless ofthevalue, neednotbeaccompanied by
anexport visaandshallnotbesubject tothelimits established under thisAgreement.
Exchange ofInformation
16. Subject tothedomestic laws, attherequest oftheother government, eachgovernment agrees
tosupply anyinformation within itspossession reasonably believed tobenecessary fortheenforcement
ofthisAgreement.
Exchange ofData
17.(A) TheGovernment oftheUnited States ofAmerica shallpromptly supply theGovernment of
Guatemala withdataonmonthly imports ofcotton, wool, andman-made fibretextiles and
textile products ofGuatemala intotheUnited States.
(B) TheGovernment ofGuatemala shallpromptly supply theGovernment oftheUnited States
ofAmerica withdataonmonthly exports ofcotton, wool, andman-made fibretextiles and
textile products ofGuatemala totheUnited States.
(C) TheGovernment oftheUnited States ofAmerica andtheGovernment ofGuatemala agree
toexchange namesake dataviacomputer diskette asagreed inaprevious technical letter.
Cooperation inthePrevention ofCircumvention
18. TheGovernment oftheUnited States ofAmerica andtheGovernment ofGuatemala recognize
theseriousness oftheproblems facing eachcountry indealing withillegal transshipment. Both
Governments agree thatsaidtranshipment isdetrimental totheeconomic interests ofeachcountry and
circumventbilateraltextileagreements.Therefore,boththeGovernmentoftheUnitedStatesofAmerica
andtheGovernment ofGuatemala agree toworkonabilateral leveltofacilitate theflowofinformation,
towork towards establishing relationships andarrangements between appropriate agencies inorder
tobetter theexchange ofspecific documents andinformation andtooutline themutually agreeable
on-going processes thatwillbetaken topromote greater cooperation andadditional exchange of
information inorder tobetter prevent andaddress illegal transshipment.
(A) TheGovernment oftheUnited States ofAmerica andtheGovernment ofGuatemala agree
totakemeasures necessary toaddress, toinvestigate and,where appropriate, totakelegaland/or
administrative action toprevent circumvention ofthisAgreement byactions such as
transshipment, rerouting, falsedeclaration ofthecountry oforigin, thefalsification ofofficial
documents, andtheunauthorized entry ofgoods.G/TMB/N/271
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(B) Bothparties agree tocooperate fully, consistent withtheirdomestic lawsandprocedures, in
instancesofcircumventionorallegedcircumventionoftheAgreement,cooperatefullytoaddress
problems arising fromcircumvention, andtoestablish therelevant factsintheplaces ofimport,
export and,where applicable, transshipment. Suchcooperation, totheextent itisconsistent
withdomestic lawsandprocedures, willinclude investigation ofcircumvention practices;
exchange ofdocuments, correspondence, reports andother relevant information aswellasthat
available through theQuota Council, totheextent available; andfacilitation ofjointplant
visits andcontacts byrepresentatives ofeither party, uponrequest andonacase-by-case basis.
When either party wishes tovisitcertain plants, theparty wishing tocarry outsaidvisit(s)
shallgivetheother party written notice tenworking daysahead, clearly stating itsreasons
tomake this(these) visit(s), andstating thenumber andname oftheplant(s) thatitwishes
tovisit, aswellasthedates forthevisit(s). Bothparties agree thattheplant(s) willnotbe
notified inadvance ofthevisit(s). Atthetimeofthevisit(s), permission shallberequested
fromtheperson incharge oftheplantatthetimeofthevisit(s), andshallbeobtained inorder
toconduct thevisit(s). Saidvisit(s) shallbemade byauthorized officials ofbothgovernments,
consistent withdomestic lawsandprocedures. Upon completion ofsaidvisit(s) theparty that
requested thevisit(s) shallpromptly submit areport onitsresults totheother government.
Both parties alsoagree tocooperate inthecontinued implementation ofanelectronic data
exchange system (EDES).
(C) Ifeither party believes thatthisAgreement isbeing circumvented, itmayrequest consultations
withthepurpose ofaddressing theissueorissues concerned withaviewtoseeking amutually
satisfactory solution. Eachparty agrees toholdsaidconsultations promptly, beginning within
30daysofawritten request accompanied byanexplanation fromtheotherpartyandconcluding
within 90days, unless extended bymutual agreement, andtocooperate fullyinterms ofthe
elements setoutinparagraph 2above.
(D) Should theparties beunable toreach asatisfactory solution during thecourse oftheconsultations
called forunder paragraph 3,thentheGovernments ofGuatemala andtheUnited States of
America agree thatwhere clear evidence regarding circumvention hasbeenprovided tothe
Government ofGuatemala, theUnited States maydeduct from quantitative limits forthat
agreement period anamount notlarger thantheamounts oftranshipped products ofGuatemala
origin. BoththeGovernment oftheUnited States ofAmerica andtheGovernment ofGuatemala
agree tomake every possible effort topunish thespecific andnamed perpetrators ofillegal
andfraudulent acts.
Inaddition, theGovernments ofGuatemala andtheUnited States ofAmerica agree that
deductions from thequantitative limits established under thisAgreement maybemade in
instances where:
(I) theGovernment oftheUnited States ofAmerica hasprovided factual information to
theGovernment ofGuatemala demonstrating asubstantial likelihood thatcircumvention
hasoccurred;
(II) theGovernment oftheUnited States ofAmerica hasrequested fromtheGovernment
ofGuatemala cooperation orinformation relevant tothepossible circumvention that
isofatypethatisavailable toorcould reasonably beobtained byit;and,G/TMB/N/271
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(III) theGovernment ofGuatemala hasfailed without adequate reason, toprovide said
information orcooperation within theperiod forconsultation outlined inparagraph 3
above.
Anysuchaction shallbenotified totheTSB, oritssuccessor, withfulljustification.
(E) If,aftercharges havebeenmade under theterms ofparagraph (D),evidence hasdeveloped
thatclearly establishes thatthecharges weremade inerror because thegoods inquestion were
infactnotofGuatemalan origin, andthere isclear evidence demonstrating thetruecountry
oforigin, thentheUnited States shallrestore Guatemala 'squantitative restraints byanamount
equivalent totheamount deducted under paragraph (D)immediately aftertheUnited States
holds consultations withthetruecountry oforigin andcharges thegoods tothatcountry.
(F) Bothparties acknowledge thefactthatthebestsolution insuchcircumvention cases isforboth
parties toadopt decisive action against thecompanies, individuals orpractices responsible for
saidcircumvention. Should theGovernment oftheUnited States ofAmerica choose toexercise
theprovisions outlined inparagraph (D)todeduct anamount from quantitative limits inthe
event thatnotlessthanthree instances ofcircumvention havebeendemonstrated within the
current orimmediately preceding agreement year, andtheGovernment ofGuatemala hasnot
applied anyoradequate measures toaddress theproblem ofarepeated circumvention andthe
Government oftheUnited States ofAmerica possesses clearevidence ofthespecific charge,
thentheGovernment oftheUnited States ofAmerica maydeduct fromthequantitative limit
amountsofuptothreetimesthetransshippedamounts,providedthatthosedeductionsareequally
distributed within thefollowing three years. Anysuchaction shallbenotified totheTSBor
itssuccessor withfulljustification. Theprovisions ofthisparagraph maynotbeinvoked if
theTSBoritssuccessor hasaffirmatively recommended thattheGovernment oftheUnited
States ofAmerica istorescind thecharge onwhich itbases thededuction ofthree times the
transshipped amounts.
(G) Where there isclear evidence demonstrating thatgoods originating inanother country have
beenshipped through Guatemala totheUnited States ofAmerica asthough theywereproducts
ofGuatemala, theGovernments ofGuatemala andtheUnited States ofAmerica agree totake
appropriate action. Such action, aswellasitstiming andscope, maybeadopted onlyafter
holding consultations withtheaimofarriving atamutually satisfactory solution andshallbe
notified totheTSBoritssuccessor withfulljustification. Saidconsultations should beheld
promptly, beginning within 30days ofreceipt ofawritten request accompanied byan
explanation, andconcluding within 90days, unless extended bymutual agreement. Should
theparties beunable toreach asatisfactory solution, thentheGovernments ofGuatemala and
theUnited States ofAmerica agree thatwhere clearevidence regarding circumvention hasbeen
provided, theUnited States ofAmerica shalltakeappropriate action which mayinclude the
introduction ofarestraint or,where arestraint already exists, thededuction fromthequantitative
limits established under thisAgreement forthatagreement period anamount equivalent tothe
goods transshipped through Guatemala. AssoonasGuatemala hasadequately established the
factthatsaidproducts havenotbeentransshipped through Guatemala, then:
(I) theUnitedStatesofAmericashallimmediatelywithdrawanyrestraintsimposedpursuant
tothisprovision; or,
(II) theUnitedStatesofAmericashallimmediatelyrestoreGuatemala'squantitativerestraints
inanamount equivalent totheamount deducted pursuant tothisprovision, afterthe
United States hasheldconsultations withtherealcountry oforigin andcharged the
goods tothatcountry.G/TMB/N/271
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TheGovernment oftheUnited States ofAmerica andtheGovernment ofGuatemala agree
thattheremaybeshipments transitting through Guatemala withnochange oralterations made
tothegoods contained insuchshipments inGuatemala. Bothparties agree thatitmaynot
begenerally practicable forGuatemala toexercise control oversuchshipments.
(H) Theparties agree thatfalsedeclaration concerning fibre content, quantities, description or
classification ofmerchandise alsofrustrates theobjectives ofthisAgreement. Where there
isclearevidence thatanysuchfalsedeclaration hasbeenmade forpurposes ofcircumvention,
bothparties agree totakeappropriate measures, consistent withtheir domestic lawsand
procedures, against exporters orimporters involved. Should either party believe thatthis
Agreement isbeing circumvented bysuch false declaration andthatno,orinadequate,
administrative measures arebeing applied toaddress and/or totakeaction against such
circumvention, thatpartyshould consult promptly withthepartyinvolved withaviewtoseeking
amutually satisfactory solution. Suchconsultations should beheldpromptly, beginning within
30daysofarequest byaparty, andconcluding within 90days, unless extended bymutual
agreement. Should theparties beunable toreach asatisfactory solution, thentheGovernments
ofGuatemala andtheUnited States ofAmerica agree thatincases where clear evidence
regarding suchfalsedeclarations hasbeenprovided, theUnited States maydeduct from the
quantitative limits established forthecurrent agreement yearanamount equivalent totheamount
ofproduct subject tothefalsedeclaration orclassification; suchaction shallbenotified to
theTSBoritssuccessor withfulljustification. Thisprovision isnotintended toprevent parties
from making technical adjustments when inadvertent errors indeclarations havebeenmade.
(I) Nodeduction fromGuatemala 'squantitative limits willbeapplicable toeachspecific instance
ofcircumvention iftheGovernment ofGuatemala hasprovided totheappropriate tradeand/or
diplomatic officials oftheGovernment oftheUnited States ofAmerica clear evidence or
information ofthecircumvention which issufficient tomake itpossible fortheUnited States
todenyentry tosaidtransshipped products prior totheirentry intotheCustoms territory of
theUnited States. Inthose instances, theparties agree thatthefavoured course ofaction shall
befortheGovernment ofGuatemala toinform theappropriate United States officials ofall
specifics oftheexported Guatemalan goods, including verification bytheGovernment of
Guatemala thatanydocumentation accompanying theshipment, including thevisaorexempt
certificate, isinvalid.
Mutually Satisfactory Administrative Arrangement
19. Mutually satisfactory administrative arrangements oradjustments maybemade toresolve minor
problems arising intheimplementation ofthisAgreement, including differences inpoints ofprocedure
oroperation.
Consultation onImplementation Questions
20. TheGovernment oftheUnited States ofAmerica andtheGovernment ofGuatemala eachagree
toconsult, upon therequest oftheother, onanyquestion arising intheimplementation ofthis
Agreement.