WORLD TRADE
ORGANIZATIONG/TMB/N/60/Add.5/Suppl.1
G/TMB/N/64/Add.2/Suppl.1
3 April 2002
(02-1674)
Textiles Monitoring Body Original:  English
AGREEMENT ON TEXTILES AND CLOTHING
Notification under Articles 2.1 and 3.1
EUROPEAN COMMUNITY
Supplement
The Textiles Monitoring Body has received a supplement to the additional notifications
made by the European Community pursuant to Articles 2.1 and 3.1.
The TMB, in accordance with Articles 2.2 and  3.5, is circulating this notification to
WTO Members for their information.G/TMB/N/60/ Add.5/Suppl.1
G/TMB/N/64/ Add.2/Suppl.1
Page 2
European Commission
Permanent Delegation
to the International Organizations in Geneva
Head of Delegation
Geneva, 26 March 2002
Subject:  Clarifications on the notifications of the quantitative restrictions maintained by
the European Community under Article 2(1) and Article 3(1) of the Agreement
on Textiles and Clothing
Dear Mrs Haimbl,
Following the accession of the People’s Republic of China to the WTO and the notifications
of the quantitative restrictions maintained by the European Community under Article 2(1) of the
Agreement on Textiles and Clothing (ref:  G/TMB/N/60/Add.5 of 16 January 2002) and Article 3(1)
of the Agreement on Textiles and Clothing (ref:   G/TMB/N/64/Add.2 of 9 January 2002), I have the
honour to hereby submit a Note on clarifications of several points in the said notifications, requested
in your Note No. 700668 dated 29 January 2002.
I would ask you to forward this notific ation to the Textiles Monitoring Body.
Yours sincerely,
(Signed for) C. Trojan
Ambassador
cc: Mr. András Szepesi
Chairman – Textiles Monitoring Body
WTOG/TMB/N/60/ Add.5/Suppl.1
G/TMB/N/64/ Add.2/Suppl.1
Page 3
Concerning the notification of the quantitative restrictions maintained by the
European Community under Article 2(1) of the Agreement on Textiles and Clothing, please find
below the following remarks:
The EC can confirm that it has notified the restrictions taken over from its previous bilateral
agreement with China, which had their roots "within bilateral agr eements maintained under Article 4
or notified under Article 7 or 8 of the MFA".  The last bilateral agreement (OJ No. L 314,
14.12.2000, page 13) outlines in its Article 4a that "the European Union will notify to the Textiles
Monitoring Body the quantitative restrictions ma intained under the MFA Agreement (save for those
quantitative limits concerning products already include d by the European Community in stages 1 or 2
of integration under the Agreement on Textiles and Clot hing) at the levels agreed for the year during
which China accedes to the WTO".  As a result, the EC has included in the notification restrictions
that were in force on 10 December except for the categories integrated in stage 1 and 2.  The table in
Annex II of this letter outlines quotas in force on the day prior to accession  and in Annex III appear
quotas eliminated on 11 December after accession.
With respect to the quota "growth-on-growth" pr ovisions stipulated in paragraphs 13 and 14
of Article 2 of the ATC, the EU increased the gr owth rate on the remaining restraint levels with
China by 25 per cent and then by 27 per cent on 1 January 2002.
As to category 33, the EC can inform that the provision of the validity of the quantitative
limits also for re-export outside the Community is only valid for this category.
Similarly, the EC confirms that the 40 per cen t of transfer possible between categories 2
and 3, indicated in the footnote to category 2 in Anne x I, part 1, is correct.  Therefore, column 5 of
the table in Annex I to this note should be rectifie d (see annex to this note).  It was already indicated
in the original Council regulation 3030/93. However, the footnote (asterisk) as such, in Annex I, part
1, can be considered as a typing error since th e same provision is indicated in the following
Appendix A.
The EC can inform that the correct wording for the flexibility provisions in force is found in
the last indent under the heading "Direct quantita tive limits" in Annex II, as also mentioned in
column 9.  The wording of group IV in column 7 should therefore be corrected (see annex to thisNote).
The quotas for European Fairs, listed in Appendi x B to Annex I, part 1 of the notification are
in addition to the quantitative limits listed in Annex I, part 1 and the levels are additional amounts
fixed on an annual basis. They constitute a separate and specific arrangement, which is described indetail in the notification of the administrative arrangement.
The industry reserve quotas are included in th e administrative arrangement and are increased
according to the same growth rates as in the respective main category. The amounts constitute a
percentage of the main category and are reflected  in Appendix A to Annex I, part 1.  The quotas
remain a priority for industry during a certain amount of time from the beginning of the year.  This
system operates to favour contacts between Chinese and European operators.  The amounts
"reserved" are parts of the quotas and if they ar e not used for this specific purpose they are not
sterilized but can be used under the quota.G/TMB/N/60/ Add.5/Suppl.1
G/TMB/N/64/ Add.2/Suppl.1
Page 4
Concerning the notification of the quantitative restrictions maintained by the
European Community under Article 3(1) of the Agreement on Textiles and Clothing, please find
below the following remarks:
The EC can confirm that it has notified the restrictions taken over from its previous bilateral
agreement with China.  The last bilateral agreement (OJ No. L 314, 14.12.2000, page 13) outlines in
its Article 5a that "the European Community w ill notify to the Textiles Monitoring Body the
quantitative restrictions maintained under the non-MF A Agreement at the levels specified for the
year during which China accedes to the WTO".  As a result, the EC has included in the notification
all restrictions that were in force on 10 December.
On the day of accession, the European Community  integrated in total 11 categories (ex 13,
ex 24, ex 39, 123, 124, 125A, 126, 127A, 127B, 140 and 151 B) (see Annex III to this letter).  On
1 January another 8 categories (ex 18, 120, 125B , 145, 146A, 146B, 160 and 161) were integrated.
These 19 integrated categories are reflected in the Notification Annex I, part 1, as having been phased
out "following accession".  According to Annex I to  the bilateral agreement, the Commission intends
to phase out "the restrictions on all remaining products no later than 1 January 2005", depending on
China’s progress in removing state trading in silk products.  In addition, both parties can at any time
request consultations in this regard.
Finally, the EC also confirms that  the growth rates noted in Annex I, part 1 and 2 apply to the
remaining quantitative restrictions in 2002-2004.G/TMB/N/60/ Add.5/Suppl.1
G/TMB/N/64/ Add.2/Suppl.1
Page 5
ANNEX I
1
Country2
Advance
utilization3
Carry-over4
Transfers
from
cat 1
to cats
2 and 35
Transfers
between
cats 2 and
36
Transfers
between
cats 4, 5,
6, 7, 87
Transfers
from
Groups I,
II, III to
Groups II,
III8
Maximum
increase in
any cat.9
Additional
conditions
China 1% 3% 1% 40% 4% 6% Further amounts
may be authorized
by the EuropeanCommission up to a
maximum of:
Column 2:  5%
Column 3:  7%
With regard to
column 7, transfers
from Groups I, II,
and III may only be
made into Groups II
and III.G/TMB/N/60/ Add.5/Suppl.1
G/TMB/N/64/ Add.2/Suppl.1
Page 6
ANNEX II
Quotas in Force until 11 December
MFA products
Third country Category Unit Quota 2002
China GROUP IA
1 tonnes 4,250
2*tonnes 29,029
of which 2a tonnes 3,750
3 tonnes 5,929
of which 3a tonnes 758
GROUP IB
4 1,000 pieces 80,946
5 1,000 pieces 25,657
6 1,000 pieces 27,346
7 1,000 pieces 12,932
8 1,000 pieces 18,172
GROUP IIA
9 tonnes 5,977
20/39 tonnes 9,445
22 tonnes 17,213
23 tonnes 11,317
GROUP IIB
12 1,000 pairs 31,073
13 1,000 pieces 501,972
14 1,000 pieces 13.288
15 1,000 pieces 16,527
16 1,000 pieces 15,969
17 1,000 pieces 11,532
26 1,000 pieces 5,380
28 1,000 pieces 74,832
29 1,000 pieces 12,678
31 1,000 pieces 77,273
78 tonnes 30,349
83 tonnes 8,914
GROUP III B
97 tonnes 2,287
GROUP V
163 tonnes 5,648G/TMB/N/60/ Add.5/Suppl.1
G/TMB/N/64/ Add.2/Suppl.1
Page 7
NON-MFA PRODUCTS
Third country Category Unit 2002
China GROUP I
ex 20 tonnes 48
GROUP IV
115 tonnes 1,203
117 tonnes 572
118 tonnes 1,340
122 tonnes 186
GROUP V
136A tonnes 419
156 tonnes 3,291
157 tonnes 12,184
159 tonnes 4,236G/TMB/N/60/ Add.5/Suppl.1
G/TMB/N/64/ Add.2/Suppl.1
Page 8
ANNEX III
Following China's accession to the WTO on 11 December 2001, the European Community
and the People’s Republic of China have agreed to implement the removal of quantitative
restrictions on textile categories related to the first and second stage of integration on the same day.
In addition, the quantitative restrictions maintained under the non-MFA Agreement were removed
as listed below.
Categories for which quotas were removed on 11 December
Category Phase-out for MFA
categories
19 Following accession
76 Following accession
Category Phase-out for non
MFA categories
126 Following accession
Category Phase-out for
categories bilaterally
agreed
Ex13 Following accession
Ex24 Following accession
Ex39 Following accession
123 Following accession
124 Following accession
125A Following accession
127A Following accession
127B Following accession
140 Following accession
151B Following accession
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