WORLD TRADE G/TMB/R/29
26May1997
ORGANIZATION(97-2207)
Textiles Monitoring Body
REPORT OFTHE THIRTIETH MEETING
1. TheTextiles Monitoring Body helditsthirtieth meeting on16and21May1997.
2. Mr.Dong-Won Kim(Korea) replaced Mr.Tong asmember witheffect asfrom1May1997.
Mr.Kimappointed Mr.Timothy Tong (Hong Kong) ashisfirstalternate, andMr.Abdul Mannan
(Bangladesh) ashissecond alternate.
3. Present atthismeeting were thefollowing members and/or alternates: Mrs. Berrig/
Messrs.Tadpitakkul;Kim/Tong;Malik;Mukerji;MissOrozcoJaramillo/Messrs.DaCostaeSilva;
Richards; Saeki; Saint-Jacques/Wentzel; Tagliani; Zapedowski/Urkan.
4. TheTMB adopted thereport ofitstwenty-ninth meeting (G/TMB/R/28).
Notification under Article 2.21oftheAgreement onTextiles andClothing (ATC)
5. TheTMB received, on13February 1997, anotification from Colombia, alsoonbehalf of
anumber ofother WTO Members thatarealsomembers oftheInternational Textiles andClothing
Bureau (ITCB), alleging certain discrepancies intheprogramme ofintegration notified bythe
European Community under paragraph 6ofArticle 2oftheATC (G/TMB/N/1 of10October 1994),
andrequesting theTMB toreview thismatter interms ofparagraph 21ofArticle 2.Duetothe
non-availability oftheMembers concerned fortheTMB'smeeting of24to26February, andasthe
Body hadalready decided toconsider some other important pending issues atitssubsequent meeting
(10to12and24March), itwasunable tostarttheconsideration ofthismatter before itstwenty-eighth
meeting (24to26March). Thiswasdecided inconsultation withtheMembers concerned andwith
theirconsent.
6. Asrequired under paragraph 21ofArticle 2,theTMB hadinvited theparticipation ofboth
Colombia andtheEuropean Community, which sentrepresentatives totheTMB'sreview ofthematter.
Atitstwenty-eighth meeting, theTMB started theconsideration oftheissues raised inthenotification
ofColombia, heard presentations byColombia andtheEuropean Community, putquestions toboth
Members anddecided toresume itsconsideration atitsnextmeeting. During thetwenty-ninth meeting
(21to23April), theTMB, afterhaving heard andconsidered further technical presentations byboth
Members, started thesubstantive discussion ofthematter, butinviewofthetechnical complexity of
theissues involved andthelackoftimeavailable, could notconclude itsdiscussion. Itdecided,
therefore, toresume theconsideration ofthisnotification atitsthirtieth meeting, scheduled for16May.
7. During thismeeting theTMB continued itssubstantive discussion ofthematter brought before
it.On21May, theTMB resumed itsthirtieth meeting andconcluded itsreview conducted pursuant
toparagraph 21ofArticle 2byadopting thefindings, observations andrecommendation detailed in
paragraphs 10to42below.G/TMB/R/29
Page2
8. Inherpresentation therepresentative ofColombia argued thatdiscrepancies intheEC's
programme ofintegration notified under paragraph 6ofArticle 2hadbeennoticed inrespect ofthe
integrated volume ofimports oftheex-positions intheHSlinesoftheATC Annex, asfollows:
- theEuropean Community hadintegrated inthefirststagetextile andclothing products
ofChapters 30to49and64to96byincluding thefollowing HSlines:
ex3921.12 ex4202.22 ex6406.99
ex3921.13 ex4202.32 ex7019.10
ex3921.90 ex4202.92 ex7019.20
ex4202.12 ex6406.10 ex9612.10
- while theimports inthese linesshould haveconformed totheproduct description in
theAnnex oftheATC, theEuropean Community hadcomputed thewhole imports
foreachofthecorresponding six-digit HSlinesandthereby theintegrated volume had
beeninflated bytheinclusion ofimports ofproducts thatwerenotcovered bytheATC;
- Colombia, alsoonbehalf ofanumber ofWTO Members thatarealsomembers of
theITCB, hadbrought thisposition tothenotice oftheEuropean Community ina
letterdated 25June1996, buttheEuropean Community initsresponse of23July1996
hadstated that"itissimply impossible tobreak down ourimport statistics forthe
ex-positions insuch awayastoenable ustoidentify theconstituent elements.
Therefore, theEuropean Community hadnochoice buttoconsider theentire tariff
positions inthecontext oftheintegration exercise";
- theEC'sexplanation hadbeenfurther examined withreference toits"Integrated Tariff
oftheEuropean Communities" (TARIC) andtheimport dataproduced bythe
EUROSTAT; thisexamination hadconfirmed thatanumber ofex-positions integrated
bytheEuropean Community werenotATC products andtherefore could notqualify
forinclusion intotheintegration programme implemented bytheEuropean Community
(forthedetailed arguments: seetheitem-by-item examination inparagraphs 16to37
below);
- theabove analysis hadledColombia toestimate thatthevolume ofimports which did
notqualify, ifexcluded from theintegration programme notified bythe
EuropeanCommunity,wouldresultinashortfallof4.9percentoutofthe16.4percent
notified bytheEuropean Community (onthebasisoftotalvolume ofimports in1990
fortheEuropean Community comprising twelve Member States).
9. Inhispresentation before theTMB, therepresentative oftheEuropean Community made the
following observations andarguments:
- theEuropean Community wassurprised bytherequest ofColombia torevert tothe
review oftheEC'sfirststage ofintegration, asinaletter addressed tothe
Vice-President oftheEuropean Commission, therepresentative ofColombia, inhis
capacity asChairman oftheITCB Council, hadstated thattheEuropean Community
"fulfilled itsobligation tointegrate 16percentinvolume terms instage 1";Colombia
hadnot,untilFebruary 1997, raised theissueofthealleged shortcomings intheEC's
firststage ofintegration and,inthemeantime, theEuropean Community hadalready
notified itsintegration programme forthesecond stagewhich included some products
under restrictions andstruck abalance bytheinclusion oftextile andclothing products
alike;G/TMB/R/29
Page3
- thetrade dataregarding theproducts tobeincluded intothecoverage oftheATC had
already beenmade available, inthecontext oftheATC negotiations, inmid-1991,
andthough theITCB'sviewatthattimehadbeenthatthiscoverage asreflected in
theproposedAnnexhadbeeninflated,thesedatahadbeenusedbyMembersthroughout
thenegotiations;
- inlightofthenegotiating history ofArticle 2oftheATCandoftheAnnex totheATC,
ithadbeenclear, wellbefore theAgreement hadbeenfinalized, thattheproducts now
challenged byColombia weretobeapart,onthebasis ofdatareferred toabove, of
theEC'sinitial stage ofintegration;
- theAnnex totheATC wasbased ontheHarmonized Commodity Description and
Coding System (HS)codes ofsix-digit levels, further digitdifferentiation wasnotan
international obligation under therespective international convention, andcompliance
withitcould notbeusedagainst theEuropean Community oranyother Member;
- thecollection ofimport datafollowed thestructure oftheEC'stariff nomenclature;
asex-positionsinHSChaptersotherthan50to63wereincludedintheproductcoverage
regardless ofwhether Members hadorhadnotfurther digitdifferentiation intheir
respective tariff nomenclature beyond their obligation toadopt thesix-digit level
structureoftheHSsystem,theissuesraisedbyColombiaconstitutedasystemicproblem
related theAnnex totheATC;
- inaddition totheEuropean Community, anumber ofother Members hadintegrated
ex-positions during thefirstand/or second integration stage(s) buttheTMB hadnot
beenrequested toreview whether these ex-positions didindeed correspond onlyto
textile products andwhether therelevant tradefigures hadbeensupplied forthe"textile
part" oftheex-positions alone;
- Colombia hadbased allitsreasoning ontheTARIC 1991, which wasonly an
information tool fortheapplication oftheEC'sCommon Customs Tariff
(CCT)/Combined Nomenclature (CN), therefore, legally itwasnotrelevant andall
references should havebeenmade totheCCT/CN inforce in1990;
- thesubmission ofColombia hadignored thattheCCT/CN comprised notonlythe
detailed six-digit positions (plus additional subdivisions, where necessary), butalso
preliminary provisions, notes andfootnotes which should have been taken into
consideration inorder toprovide aproper interpretation ofproduct classification;
- inaddition,anydetailedanalysisshouldhavebeenprecededbyreferencetothe"General
Rules fortheinterpretation oftheCombined Nomenclature" which formed anintegral
partoftheCNitselfandhadtobeapplied when developing anyreasoning ontheCN;
- ontheassumption, which theEuropean Community refuted, thatColombia 'sassertions
bothonthequestion ofprinciple andonthequestion ofdetails (fordetails: seethe
item-by-item examination inparagraphs 16to37below) were correct, thealleged
shortfall bytheEuropean Community foritsfirststage ofintegration would beless
thanthe4.9percentindication given byColombia, asthelatter hadnotcorrected the
figure related totheEC'stotalvolume ofimports in1990 bysubtracting theamount
thatColombia believed tobenon-ATC trade;G/TMB/R/29
Page4
- afteradjustments implemented asabove andconversion oftrade from EC-12 tothe
European Community comprising fifteen Member States onthebasisofwhathadbeen
claimed aspresumably non-ATC relevant during thefirststageofintegration, theresult
would be,without prejudice totheposition oftheEuropean Community onprinciples
andmerits, thatthestage 1andstage 2integration bytheEuropean Community were
wellabove 33percent; i.e.theEC'sobligations under bothstages 1and2remained
fulfilled;
- assuming thatitwaspossible, atleastforsome ex-positions, todistinguish whatwas
ATC relevant fromwhatwasnot,itshould beconcluded thatallcalculations forthat
Member 'sintegration inrespect ofbothstage 1andstage 2hadtoberevised;
- another conclusion which flowed fromtheabove would bethat,asaresult ofreducing
thebasedatabythetrade volume tobefound tobenotATC relevant, there would
belessvolume oftrade tobeintegrated instage 3;
- thegenuineattemptbytheEuropeanCommunitytoapproachtheintegrationprogramme
inapositive spirit didnotseem tohavebeengiven thenecessary credit.
10. Incommencing itsreview, pursuant toparagraph 21ofArticle 2,oftheissues raised inthe
notification byColombia, theTMB tooknoteofthestatement oftherepresentative ofColombia to
theeffect thatthematter referred totheTMB didnotconstitute intheformal sense adispute between
Colombia andtheEuropean Community, butthatittouched upon important aspects related tothe
EC'simplementation ofbasic obligations under theATC.
11. Asthematter theTMB wasinvited toconsider related tothefirststage integration programme
bytheEuropean Community, which hadalready beenreviewed bytheTMB, theBody feltitnecessary
toclarify whatithaddoneinterms ofreviewing integration programmes notified byMembers, including
thatoftheEuropean Community. During these reviews, onthebasis oftheproduct description and
classification notified byMembers, andoftradedataprovided bythemtheTMB hadchecked whether
thebasic requirement ofintegrating notlessthan16percentofthetotalvolume ofthebaseyear's
imports hadbeenmet,andwhether products ofthefourgroups referred toinparagraph 6ofArticle 2
hadbeenrepresented intherespective integration programmes. InthecaseofMembers submitting
notifications pursuant toparagraph 7(a)ofArticle 2,liketheEuropean Community, theTMB hadalso
examined whether products previously subject toquantitative restrictions hadbeenincluded intothe
programme ofintegration, ornot.TheTMB'sreview andtaking noteoftheintegration programmes
notified hadbeenwithout prejudice toMembers 'rights andobligations under therelevant provisions
oftheATC. Colombia hadexercised these rights byreferring theparticular matter (related tothe
EC'sfirststage ofintegration programme) totheTMB.
12. TheTMB wasfullyaware thattheissues raised inthenotification ofColombia involved, inter
alia,complex technical aspects regarding which TMB members individually andtherefore alsothe
TMB asabody didnothavefullknowledge andtechnical expertise. Itseemed tobeimpossible to
takeaprecise position withrespect tothealleged problems andshortcomings identified byColombia
without addressing, withthenecessary details andprecision, suchissues astariff classification and
availability (orlackthereof) ofstatistical (trade) dataconforming fully totheproduct description
contained intheAnnex totheATC; and,intheabsence ofsuchinformation, theavailability (orlack
thereof) andreliability ofestimates thatcould beprovided.
13. TheTMB therefore considered theappropriateness ofrequesting thecontribution ofindependent
technical expert(s). Indeciding whether ornottoseeksuchexpertise, theTMB'smainconsideration
wasthekindofcontribution itcould expect fromindependent experts. While recognizing thatexpertG/TMB/R/29
Page5
views onclassification could havebeenuseful, theTMB wasequally aware thattechnical experts would
beunable toprovide statistical dataor,ifappropriate, estimates regarding theEC-15 volume ofimports
in1990 inrespect oftheex-positions integrated, assuchdataorestimates could notbecollected and
provided except bytheimporting Member itself. Thus, itwasclear totheTMB thatreliance on
independent experts 'views would nothaveenabled theBody toanswer thequestion astowhatwas
theexact trade coverage oftheproducts integrated bytheEuropean Community. Inlightofthese
considerations andkeeping alsoinmind thetime-requirement involved, theTMB concluded thatit
would notseekadvice from independent experts.
14. While reaching theabove conclusion, theTMB emphasized theserious limitations or,inmost
cases, theimpossibility forittoprovide precise findings, inparticular withrespect totheexact volume
oftrade intheex-positions oftheAnnex totheATC. Ontheother hand, onthebasis ofthe
presentations andarguments made byColombia andtheEuropean Community, theTMB thought itself
tobeinaposition toestablish whether ornotthere were problems andpossible shortcomings with
theapproach adopted bytheEuropean Community during thefirststage ofintegration. Inthe
affirmative, intheview oftheTMB, themagnitude oftheproblems could bestbeassessed bythe
importing Members itself. Thesame applied tothepossible remedies, ifanyneedforsuchremedies
wastobeidentified.
15. Before addressing item-by-item thealleged discrepancies identified byColombia, theTMB
considered themore general observations andarguments putforward bytheEuropean Community
(seeparagraph9above).IttooknoteoftheinformationprovidedbytheEuropeanCommunityaccording
towhich theITCB, inmid-1996, hadrecognized thattheEuropean Community hadfulfilled its
obligations tointegrate therequired volume oftrade during stage 1,andalsooftheexplanation given
byColombia thatmore timehadbeennecessary fortheITCB toexamine thetechnical details andtheir
possible implications andtoreach theappropriate conclusions, including therequest addressed tothe
TMB toreview particular elements oftheEC'sintegration programme. Astothereference tothe
negotiating history oftheATC and,inparticular, tothefactthatthesame tradedataasthose provided
bytheEuropean Community initsnotification hadalready beenavailable since 1991, theTMB was
aware thatthesubmission ofthisdatahadbeenpartofanegotiating process. Thefactthatnegotiating
partners hadnotraised concerns atthattimecould notaffect therights ofanyMember toformulate
aviewregarding thesame subject matter during theimplementation oftheAgreement andtorequest
theTMB toreview anyparticular matter pursuant totheprovisions oftheATC. TheTMB, while
agreeing withtheEuropean Community thatunder theHSsystem theinternational obligation of
signatories oftherelevant international convention waslimited toincorporate onlysix-digit level
differentiation intotheirrespective tariffnomenclature, wasequally aware thattheATC coverage was
defined initsAnnex and,therefore, onlytheproducts intheAnnex could beintegrated andformpart
ofthe"total volume oftheMember 's1990 imports oftheproducts intheAnnex". TheTMB took
noteofthepointmade bytheEuropean Community thatanumber ofotherMembers hadalsointegrated
ex-positions during stage 1and/or stage 2,butitobserved thatthematter referred totheTMB and
therefore thesubject ofitsexamination wasrelated andlimited tocertain aspects oftheEC'sprogramme
ofintegration during stage 1.TheTMB alsotooknoteoftheEC'sarguments regarding thestatus
oftheTARIC. Atthesame timeitobserved thatnotonlythestructure, butinmostcases, thelevel
ofdifferentiationoftheCommonCustomsTariff/CombinedNomenclature(CCT/CN)alsocorresponded
tothatoftheTARIC. TheTMB further agreed withtheEuropean Community thataproper product
classification required thetaking intoconsideration ofthegeneral orspecific rules ofinterpretation,
betheyreflectedingeneralinterpretativerulesorinpreliminaryprovisions,notesandfootnotes.Finally,
theTMB agreed withtheEuropean Community thatthealleged shortfall bytheEuropean Community
initsfirststage ofintegration could beproperly calculated onlyiftheamount oftrade claimed to
benon-ATC relevant wassubtracted from thefigure given fortheEC'stotalvolume ofimports in
1990.G/TMB/R/29
Page6
Chapter 39
16. Colombia heldtheview thatinrespect ofthethree ex-positions ofHSChapter 39itcould
bedetermined thatnoneofthesub-divisions oftheHSlines3921.12, 3921.13 and3121.90 conformed
totheproduct description intheAnnex oftheATC. Therefore, therespective import volumes, asthey
covered non-ATC products, didnotqualify forinclusion intotheintegration programme under the
ATC.
17. TherepresentativeoftheEuropeanCommunity,byreferencetothegeneralrulesofinterpretation
regarding “mixtures orcombinations ”intheCommon Nomenclature (CN) andtosome specific
explanatorynotescontainedtherein,statedthatmanyoftheproductsfallingwithinHSnumbers3921.12,
3921.13 and3121.90 weretextile products asdefined intheAnnex totheATC which, because they
werecombined withplastic, hadtobeclassified inChapter 39oftheHS.Insupport ofthis,heprovided
samples ofsome oftheproducts falling under thethree positions, aswellascopies ofbinding tariff
information issued bythecustoms services ofindividual Member States oftheEuropean Community.
18. Inreviewing theissues raised inrelation totheex-positions under HSChapter 39,theTMB
recalled thatthethree HSnumbers included intheintegration listoftheEuropean Community
(ex3921.12, ex3921.13 andex3921.90) were, intheAnnex totheATC, described collectively as
“woven, knitted ornon-woven fabrics coated, covered orlaminated withplastics ”.Itnoted thatthese
HSnumbers andproduct descriptions matched exactly theproducts under HSChapter 39integrated
bytheEuropean Community. TheTMB noted, however, thatsinceimport statistics werenotavailable
atamore detailed level, theEuropean Community hadchosen tocount, forthepurpose ofcalculating
thevolume ofimports oftheproducts integrated forthefirststage ofimplementation oftheATC,
theimport volume ofthewhole HSnumbers 3921.12, 3921.13 and3921.90, andnottheportions of
these three HSnumbers which precisely corresponded totheproducts covered bytheATC.
19. Onthebasis oftheabove considerations andindications, theTMB could notagree withthe
contention ofColombia thatthetotality oftheimport volume ofeachofthethree HSnumbers under
Chapter 39didnotqualify forthepurpose ofcalculating thevolume ofimports oftheproducts integrated
forthefirststage oftheATC. Thiswould havebeentantamount tosaying thatthese products could
not,under thecircumstances, beintegrated bytheEuropean Community during thelifetime ofthe
ATC. Ontheother hand, theTMB could notaccept thearguments presented bythe
European Community thatitcould include thevolume corresponding tothetotality ofimports into
theEuropean Community ofthefullHSnumbers.
20. Itwasclearfrom theproduct specification anddescription oftheAnnex totheATC thatnot
alltheproducts falling under HSlines3921.12, 3921.13 and3921.90 werecovered bytheATC, and
that, therefore, theimport volume ofnon-covered items should nothave been included inthe
EC'snotification. Intheabsence ofappropriately detailed statistical datatheTMB wasnotinaposition
todetermine theprecise volume ofimports thatshould becounted forthepurpose ofcalculating the
volume ofimports oftheproducts integrated forthefirststage oftheATC. Inthisrespect theTMB
noted thattherepresentative oftheEuropean Community hadestimated thatatleast90percentof
theproducts concerned were acombination ofplastics withtextile materials.
Chapter 42
21. With regard tothefourex-positions ofChapter 42integrated bytheEuropean Community,
Colombia stated onthebasisofTARIC 1991thatsub-positions 4202.12.11, 4202.12.19 and4202.12.50
were concerned withnon-ATC products, while 4202.12.91 and4202.12.99 covered theex-position
oftheAnnextotheATC,atleastpartially.Sub-position4202.22.10dealtwitharticlesofplasticsheeting
andhence, intheview ofColombia, wasnotconsistent withtheATC Annex, while 4202.22.90G/TMB/R/29
Page7
conformed totheproduct description oftheATC andwaseligible forintegration purposes. Thesame
situation occurred inHSline4202.32. Regarding HSline4202.92, Colombia heldtheview that
ex-positions 4202.92.11, 4202.92.15 and4202.92.19 didnotconform totheATC description, while
theremaining other threeex-positions (4202.92.91, 4202.92.95 and4202.92.99) wereinconformity.
22. TheEuropeanCommunityheldtheviewthatnoneofthesub-positionsunderChapter42excluded
textiles. Alltheproducts belonging tothefourpositions ofthisChapter were described asluggage
withanouter-surface ofeither textiles orplastics. Iftheouter-surface wereoftextiles, theproduct
incorporated some typeoftextile fabric coming fromHSChapter 59.Theinclusion ofthiscategory
ofproducts intotheintegration programme hadnotbeenchallenged byColombia. If,ontheother
hand, theouter surface oftheluggage appeared intheclassification tobemade ofplastics, these were
plastic components which, since theycould becombined withtextiles, could beclassified under the
ex-positions ofChapter 39which, asalready explained bytheEuropean Community, didindeed fall
under theproduct coverage oftheATC.
23. Inreviewing theissues raised inrelation totheex-positions under Chapter 42,theTMB recalled
thattheAnnex totheATC contained thefollowing classification andproduct description:
ex4202.12 )
ex4202.22 )Luggage, handbags andflatgoods, withanouter-surface predominantly of
ex4202.32 )textile materials.
ex4202.92 )
According toitsnotification, theEuropean Community integrated thesefourex-positions withaproduct
description identical tothedefinition provided intheAnnex totheATC.
24. TheTMB observed thatalltheproducts classified under HSlines4202.12, 4202.22, 4202.32
and4202.99 were grouped intotwosub-categories, depending onthematerial oftheouter surface
oftheproduct. Colombia accepted thatproducts withanouter-surface oftextile materials wereeligible
forintegration under theATC, butColombia andtheEuropean Community disagreed astowhether
ornotproducts withanouter surface ofplastic sheeting orofmoulded plastic fellunder theproduct
coverage oftheATC. IntheviewofColombia theydidnot,whereas theEuropean Community argued
thatplastic sheeting ormoulded plastic could becombinations ofplastic withtextile materials and,
therefore, could beclassified under Chapter 39.TheTMB observed, however, thattheEuropean
Community hadnotstated thatalltheproducts withanouter surface ofplastic sheeting orofmoulded
plastic contained textile materials. Furthermore, inreply toquestions putbytheTMB, theEuropean
Community stated thatprobably 95percentoftheproducts concerned werenotmade ofplastics alone.
25. Onthebasis ofthearguments andexplanations provided, theTMB could notagree with
Colombia thatthetotality ofpositions 4202.12.11, 4202.12.19, 4202.12.50, 4202.22.10, 4202.32.10,
4202.92.11 4202.92.15 and4202.92.19 should bedisregarded forthepurpose ofintegration under
theATC, nordiditagree withtheEC'sargument thattheyshould befullyincluded. With respect
totheEC'sposition, while itcould beadmitted thatthetariff positions enumerated above didinclude
luggage ofplastic sheeting thatwasproduced bycombining plastics withtextile materials, ithadnot
beendemonstrated thatallthese products were produced inthismanner. Therefore, theintegration
programme adopted bytheEuropean Community could alsohaveincluded imports which didnotfall
under thecoverage oftheATC. TheTMB wasnot,however, inaposition toassess themagnitude
ofthisdiscrepancy; itreiterated theviewthatthisinformation could bestbeprovided bytheimporting
Member itself.G/TMB/R/29
Page8
Chapter 64
26. Colombia stated thatonlyfootwear uppers (ex6406.10) made oftextile material would qualify
forintegration under theATC. Positions 6406.10.11 and6406.10.19 were concerned withuppers
andpartsofuppers made ofleather, while 6406.10.90 dealtwithuppers ofmaterial other thanleather,
includingtextiles.Therefore,onlytheimportsofthelattercouldqualifyforinclusionintotheintegration
programme. IntheAnnex totheATC, ex-position 6406.99 waslimited tolegwarmers andgaiters
oftextile material. Itappeared toColombia thatonlyimports ofposition 6406.99.10 conformed to
theproduct description oftheATC.
27. TheEuropean Community admitted thatananalysis oftheCCT description could leadtothe
conclusions reached byColombia, butdrew attention tothegeneral rulesofinterpretation oftheCN
onmixtures andcombinations andtothespecific explanatory notes oftheHSnomenclature. Areading
oftherespective product descriptions together withthelatter rulesandnotes made itclearthatinthe
caseofmixtures orcombinations, evenifthetextiles component wasnotspecified, itcould nevertheless
bepresent. With respect toposition 6406.10, theclassification wasunable toprovide ananswer as
towhatcould beclassified astextiles andwhatcould notand,therefore, despite amargin ofdoubt,
theEuropean Community hadtomake anassumption. Inthecaseofposition 6406.99, theproducts
affected were made mostly oftextile materials.
28. Onthebasis ofcomparing therespective product descriptions andtaking intoaccount the
arguments presented, theTMB wasoftheview that, though there could beproducts under HS
number 6406.10 which contained amixture orcombination ofleather withtextile materials, mostof
theproducts classified under CCT positions 6406.10.11 and6406.10.19 werepresumably uppers or
parts ofuppers made ofleather, which were notpartoftheAnnex totheATC. Imports ofleather
uppers could notqualify forintegration under theATC.
29. Withregard toHSex6406.99, theTMB understood thatgaiters wereincluded intheproduct
description ofCCTline6406.99.10, while legwarmers, theonlyother product included intheAnnex
totheATC, could presumably fallunder sub-headings 6406.99.10 or6406.99.90. Products defined
in6406.99.30 and6406.99.50 didnotseem tocorrespond totheproduct description oftheATC.
Chapter 70
30. HSline7019.10 dealtwithslivers, rovings, yarnandchopped strands ofglassfibres ofwhich,
intheview ofColombia, onlyyarns offibre glass were eligible forintegration. Onthebasis of
TARIC 1991, Colombia concluded thatonlyposition 7019.10.59 conformed totheproduct description
oftheATC,while7019.10.10,7019.10.51and7019.10.99shouldbeexcludedfromtheEC'sintegration
programme.
31. TheEuropean Community heldtheviewthatnoneoftheexisting sub-positions under 7019.10
excludedclassificationofyarns:availablebreakdownsreferredtospecifictypesofyarnsonly.Colombia
hadnotcontested thattheEuropean Community hadrightly included ex-position 7019.20 intoits
integration programme, andproducts falling under thisposition (woven fabrics offibreglass) were
made ofproducts classified under 7019.10. Moreover, according totheCommunity, anumber of
other Members hadincluded thesame products intotheirrespective programme ofintegration. The
explanatory notes toCCT line7019.10 made itclearthatthreads, oneoftheproducts challenged by
Colombia, wereavariety ofyarn. TheFrench version ofCCT forthreads usedthenotion of"fils"
(inEnglish: yarn). Inthelightofallthese reasons theEuropean Community wasconvinced thatthe
integration ofallsub-positions under 7010.10 wasjustified.G/TMB/R/29
Page9
32. Inreviewing theissues raised inrelation totheex-positions under Chapter 70,theTMB recalled
thattheAnnex totheATC contained thefollowing classification andproduct description:
ex7019.10 Yarns offibreglass
ex7019.20 Woven fabrics offibreglass.
According toitsnotification, theEuropean Community integrated thesameex-positions, withthesame
product descriptions asabove.
33. Withrespect toHSex7019.10, theTMB agreed withtheEuropean Community andColombia
thatHSline7019.10.59 contained yarns andshould becounted forthepurpose ofcalculating thevolume
ofimports tointegrate. Similarly, theTMB wasoftheviewthatsub-position 7019.10.99 could also
include yarns, sincethestructure ofheading 7019.10 aswellastheexplanatory notes intheCCTmade
itsufficiently clearthatyarncould beproduced ofbothfilaments andstaple fibres. Ontheother hand,
theTMB wasunable toreach adefinitive conclusion astowhether theproducts under sub-headings
7019.10.10 and7019.10. 51could correspond tothedefinition intheAnnex oftheATCforex7019.10
(i.e.yarns offibreglass).
Chapter 96
34. Colombia stated thatHSline9612.10 dealtwithtypewriter ribbons, ofwhich products under
sub-position 9612.10.10 weremade ofplastics, while 9612.10.90 wereofmaterial other thanplastics.
Theformer being ofplastics didnotqualify forintegration, thelatteralone could bedeemed asconsistent
withtheproduct description oftheATC.
35. IntheviewoftheEuropean Community, noneofthetwosub-positions expressly excluded
textiles.
36. Inreviewing theissues raised inrelation totheex-position under Chapter 96,theTMB recalled
thattheAnnex totheATC contained thefollowing classification andproduct description:
ex9612.10 Woven ribbons, ofman-made fibres, other thanthose measuring lessthan
30mminwidth andpermanently putupincartridges.
According toitsnotification, theEuropean Community integrated theex-position withtheproduct
description asabove. CCT 1990 provided thefollowing breakdown:
9612.10 -Ribbons:
9612.10.10 --ofplastics.
9612.10.90 --other.
37. Following theexamination ofproducts falling under HS9612.10.10, theTMB considered it
unlikely that,inpractical terms, suchproducts would include textile products. Therefore, itappeared
totheTMB thatonlyimports under sub-position 9612.10.90 could qualify forintegration under the
ATC.
38. Onthebasis ofthethorough examination, asdetailed above, ofthematter referred toitby
Colombia, theTMB reached thefollowing conclusions:
39. TheTMB agreed withColombia thattheintegration programme oftheEuropean Community
forthefirststage hadalsoincluded certain imports which didnotqualify forintegration astheydid
notfallunder thecoverage oftheATC, asdefined initsAnnex. TheTMB observed thatwithrespectG/TMB/R/29
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toanumber ofHSex-positions concerned thiswasnotcontested bytheEuropean Community, which
inparticular referred todifficulties ortheimpossibility ofproviding tradedatafortheseproducts strictly
conforming tothedescription contained intheAnnex totheATC.
40. TheTMB wasoftheview, ontheother hand, thatthelikely share ofnon-ATC imports and
ofthecorresponding trade volume thusnotproperly integrated, waslessthanclaimed byColombia.
Thisfollowed fromthefactthatnotallthediscrepancies alleged byColombia seemed, following careful
analysis, tobewell-founded, andthatColombia hadnotcorrected thefigure related totheEC'stotal
volume ofimports in1990 bysubtracting theamount thatwasbelieved tobenon-ATC trade.
41. Also duetothelackofreliable statistical information, theTMB wasnotinaposition to
pronounceitselfonthemagnitudeofthediscrepancieswhichhadoccurred.Itappearedhoweverpossible
thatafternecessary corrections, theEC'sintegration programme could account forlessthan16percent
oftheEC'stotalvolume of1990 imports. TheTMB believed thatthesizeoftheshortfall, ifany,
could bestbeassessed bytheimporting Member itself.
42. TheTMB, therefore, recommended thattheEuropean Community re-examine itsfirststage
integration programme inlightoftheTMB'scomments andfindings, asreflected above. TheTMB
expected theEuropean Community toreport ontheresults ofthisexamination asrapidly aspossible.
TheTMB agreed thatitwould keepthismatter under review.
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Observations bytheTMB
43. During itsreview pursuant toparagraph 21ofArticle 2ofthenotification made byColombia,
alsoonbehalf anumber ofother WTO Members thatarealsomembers oftheITCB, alleging certain
discrepancies intheprogramme ofintegration notified bytheEuropean Community under paragraph 6
ofArticle 2oftheATC (seeparagraphs 5to42above), theTMB noted thestatement ofthe
EC'srepresentative thatseveral otherWTO Members hadincluded inthelistofproducts tobeintegrated
inthefirstand/or second stages ofimplementation oftheATCproducts ofthose HSlinesintheAnnex
forwhich onlypartofthelinefellunder thecoverage oftheATC (indicated as“ex”HSlinesinthe
Annex).
44. Withregard totheprogrammes forthefirststageofintegration which hadalready beenreviewed
bytheTMB, theBody noted thatithadnotascertained whether thestatistical information provided
byMembers referred tothewhole HSlineoronlytothatportion oftheHSlinecovered bytheATC.
TheTMB, therefore, decided toverify withtheMembers concerned whether thevolume ofimports
theyhadnotified forthe“exHSlines”related precisely totheproducts described intheAnnex.
45. Withrespect tothesecond stageofintegration thereview ofwhich hadnotyetbeencompleted
bytheTMB, theBody decided topaydueregard tothese issues.