WORLD TRADE WT/DS85/9
G/RO/D/1/Add.1
ORGANIZATION G/TBT/D/13/Add.1
25February 1998
(98-0680)
Original: English
UNITED STATES -MEASURES AFFECTING
TEXTILES AND APPAREL PRODUCTS
Notification ofMutually-Agreed Solution
Thefollowing communication, dated 11February 1998, from theUnited States ofAmerica
andtheEuropean Communities, iscirculated pursuant toArticle 3.6oftheDSU.
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Theauthorities oftheUnited States ofAmerica andoftheEuropean Community hereby notify
theDispute Settlement Body thattheyhave reached amutually agreed solution intheir dispute
“United States -Measures affecting textiles andapparel products ”(WT/DS85/1).
Thesolution issetforth theinthefollowing documents.
1. Agreement topostpone consultations andProcès-Verbal prepared on15July1997;
2. Exchange ofletters dated 6August 1997 and19September 1997.
Copies ofthisletter areaddressed totheChairman oftheTextiles Monitoring Body, tothe
Chairman oftheCommittee onRules ofOrigin, totheChairman oftheCouncil forTrade inGoods
andtotheChairman oftheCommittee onTechnical Barriers toTrade.WT/DS85/9
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THE UNITED STATES TRADE REPRESENTATIVE
Executive Office ofthePresident
Washington, D.C. 20506
SirLeon Brittan
VicePresident
Commission oftheEuropean Communities
RuedelaLoi200
1049 Brussels, Belgium
Dear Leon:
Ihavethehonor torefer totheattached procès-verbal prepared onJuly15,1997 between
delegations fromtheEuropean Commission (EC), ledbyMr.Alistair Stewart, andtheUnited States,
ledbyAmbassadorRitaHayes,concerningtheresolutionofEuropeanCommunityconcernswithrespect
toU.S.rulesoforigin forcertain textile products. Ialsorefertoaletter dated August 1,1997 from
Mr.StewarttoAmbassadorHayesconcerningtheacceptance,withonechange,ofthesettlementoutlined
intheprocès-verbal byourMember States aswellastheprocedure forfinalizing theplan.
Onbehalf oftheUnited States, Iaccept thetextoftheprocès-verbal, withthechange in
paragraph 3from“nolaterthantwomonths ”to“nolaterthanonemonth ”.Itismyunderstanding
that,liketheUnited States, theEuropean Community willusebestefforts toconclude theWorld Trade
Organization (WTO) harmonization work programme byJuly20,1998, dateestablished byoperation
oftheWTO Agreement onRules ofOrigin.
Iftheforegoing isinconformance withtheunderstanding oftheEuropean Community, this
letterandaletterofconfirmation fromyou,together withtheprocès-verbal, willconstitute anagreement
between thetwogovernments. Thesettlement agreement willbecome effective upon myreceipt of
yourconfirming letter.
Sincerely,
Charlene Barshefsky
cc: Alistair Stewart
RitaHayesWT/DS85/9
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THE RIGHT HONOURABLE
SIRLEON BRITTAN, QC
VICE-PRESIDENT OFTHE EUROPEAN
COMMISSION
19IX1997
Thank youforyourletter of6August 1997 containing yourconfirmation, onbehalf ofthe
United States ofAmerica, oftheundertakings andcommitments onthepartoftheUSA which are
described intheprocès-verbal attached toyourletter.
Itismyunderstanding thatthetimetable inyourletter allows thecurrent Congress toadopt
anamendment totheUSlegislation onrules oforigin. Onthisbasis andonbehalf oftheEuropean
Commission, Ihavethehonour toconfirm thattheprocès-verbal andyourletter together constitute
anappropriate settlement tothedispute onthenewUSrules oforigin fortextile products.
Ishould alsoliketoacknowledge receipt ofthecopy oftheletter supporting thesettlement
thattheUSindustry hassenttoAmbassador RitaHayes. Asyouknow, suchexpression ofsupport
from theUSindustry isseeninEurope asimportant toensure asmooth process ofimplementation
ofthissettlement.
Ms.Charlene Barshefsky
TheUnited States Trade Representative
Executive Office ofthePresident
Washington D.C. 20506
USAWT/DS85/9
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PROCES-VERBAL
1. Delegations representing theUnited States andtheEuropean Community metinGeneva on
July15tocontinue discussions onEuropean Community concerns about U.S.textile rulesof
origin applicable from July1,1996. Bothsides reaffirm thetradition ofclose cooperation
between theUSandtheEuropean Community inthissector andcommitted themselves to
achieving amutually satisfactory resolution inthiscase.
2. With respect totheEuropean Community ’srequest thattheUSreturn totherules oforigin
setforthin19C.F.R. 12.130 fordyedandprinted textile andapparel products, theUSconfirms
thatthiswould require anamendment toUSstatute. TheUSproposes thatthetiming and
framework forsuchalegislative change should beaftertheconclusion ofnegotiations inrespect
oftheWTO harmonized rules inrespect oforigin, scheduled forJuly20,1998. TheUS
commits topropose itsprior rules forsilkaccessories, silkfabrics, dyedandprinted cotton
fabrics, dyedandprinted man-made fibrefabrics anddyedandprinted vegetable fibrefabrics
inthecontext ofthose WTO rules oforigin harmonisation negotiations.
3. TheUSAdministration willpropose toCongress notlaterthantwomonths fromJuly20,1998
anamendment totheUSrules oforigin fortheabove products tobring those rules into
conformity withtherelevant provisions currently setforth in19C.F.R. 12.130 orwiththe
rulesthathavebeenagreed attheconclusion oftheWTO harmonisation process, ifthose rules
aredifferent fromthose setforthin19C.F.R. 12.130 unless otherwise agreed bytheEuropean
Community andtheUnited States inthecontext oftheircooperation inthesector.
4. Bothsidesagree toconsult onanyother issues concerning textile rulesoforigin withtheintent
ofreaching mutually satisfactory solutions.
5. TheUSrecognizes that,priortotheimplementation ofthelegislative amendments setoutabove,
trade between theUSandtheEuropean Community inrespect oftheproducts, thesubject
oftheEuropean Community ’sconcern, should notbedisturbed orresult indiminution ofaccess
totheUSmarket incomparison withtrade prior toJuly1,1996.
6. Inresponse totheabove concerns andwithaviewtofacilitating tradeinrespect ofsuchproducts
prior totheimplementation oftheabove legislative amendments theUSwill:
(i) Silkscarves andfabric
immediately begin theprocess inaccordance withitsdomestic lawsandprocedures
toamend U.S.C. 1304, general country oforigin marking law,tocreate anexemption from
themarking requirements forimported silkscarves (6214.10.10) andsilkfabric (5007).
Asaresult ofthese products being exempt from thegeneral marking requirements:
- Silkscarves andfabric dyedandprinted intheEuropean Community onimported fabric
willnothavetobemarket as“Made inChina ”(orother country oforigin);WT/DS85/9
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- Silkscarves andfabric maybemarked withanyoftheappellations setoutinAnnex I
hereto withthename oftheappropriate European Community Member State, which willalso
satisfy theconsumer information requirements imposed under domestic laws.
(ii) Printed cotton fabrics
create break-outs fordischarge printed fabrics under thefollowing provisions ofthe
U.S. Harmonised Tariff Schedule (U.S.H.T.S.) andwillensure thatthese provisions are
exemptedfromquantitativerestrictionsmaintainedundertheAgreementonTextilesandClothing
andalsofromtextile visarequirements inrespect ofEgypt, Turkey, Thailand andIndonesia.
TheU.S.H.T.S. provisions are:
5208.52.30.40 (Category 313-Sheeting)
5208.52.40.40 (Category 313-Sheeting)
5208.52.40.60 (Category 315-Printcloth)
5208.59.20.20 (Category 326-Sateen)
5208.59.20.90 (Category 317-Twill)
5209.51.60.20 (Category 314-Poplin/Broadcloth)
5209.51.60.30 (Category 313-Sheeting)
5209.59.00.20 (Category 326-Sateen)
5211.59.00.20 (Category 326-Sateen)
(iii) Printed man-made fibrefabrics
takethenecessary procedures toimplement break-outs thathavetheeffect ofremoving
fromquota coverage discharge printed fabrics incategory 611inrespect ofMalaysia, categories
611,618and629inrespect ofIndonesia and611inrespect ofThailand.
7. Inview ofthecommitments bytheUnited States inrespect offorthcoming legislative
amendments andtoensure thatintheinterim trade continues undisturbed, theEuropean
Community proposes topostpone theformal consultations intheWTO. TheEuropean
Community reserves therighttorevive those consultations intheevent thattheUnited States
doesnotintroduce, andthereafter timeously enact, thelegislative amendments asproposed
above orintheevent that,during theperiod prior totheimplementation ofsuchlegislative
amendments, tradeinthose products thatarethesubject oftheEuropean Community ’sconcern
isdisturbed, oraccess totheUSmarket diminished, incomparison withtrade priortoJuly1,
1996.WT/DS85/9
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ANNEX 1
Asaresult ofamendment totheU.S.Country ofOrigin Marking Statute toExempt SilkScarves
andSilkFabrics From theRequired Origin Marking, thesilkscarves andfinished silkfabrics exported
from Europe maybemarket asfollows:
“DESIGNED INITALY ”
“DYED AND PRINTED INITALY ”
“CutandSewn inItaly”
“FASHIONED INITALY ”
“CRAFTED INITALY ”*
“CREATED INITALY ”*
“GUCCI OFITALY ”
“DESIGNED AND PRINTED BYGUCCI INITALY ”
“CRAFTED BYGUCCI INITALY ”
“CREATED BYGUCCI INITALY ”
* Customs willhavetoissue ageneral notice toexplain themeaning ofthewords, “crafted ”
and“created ”forsilkscarves andsilkfabrics thatareexempt from themarking statute.
N.B. “Italy”isgiven asanexample ofappropriate Member State oftheEuropean Community.
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