. /.WORLD TRADE
ORGANIZATIONG/TMB/R/78
10 July 2001
(01-3430)
Textiles Monitoring Body
REPORT OF THE SEVENTY-NINTH MEETING
1. The Textiles Monitoring Body held its seventy-ninth meeting on 18, 19 and 21 June 2001.
2. Present at this meeting were the following members and alternates:
Mr. Bernabe/Mrs. Booncharoen; Messrs. Fox-Dr ummond Gough/Rosas; Kiener/Karapinar; Kumar;
Lee; Moriya; Moroz/Wentzel; Nayyar; Richards; Tagliani.
3. The TMB adopted the report of its seventy-eighth meeting (G/TMB/R/77).
Notification under Article 2.17 of the ATC
4. The TMB reviewed, pursuant to Article 2.21, the notification made by the United States of
the administrative arrangements concluded between the United States and Oman (G/TMB/N/383 and
Add.1).  The notification stated, inter alia , that the provisions notified had been drawn from the
bilateral agreement previously concluded between the United States and Oman relating to trade incotton, wool, man-made fibre, non-cotton vegetable fibre and silk-blend textiles and textile products
and that these provisions had been agreed by the United States and Oman as being necessary for the
proper implementation of restrictions notified to the TMB under Article 2.1 of the ATC.  Recalling
that according to Article 2.17 "administrative arra ngements deemed necessary in relation to the
implementation of any provision of [Article 2], shall be a matter for agreement between the Membersconcerned", the TMB noted that the administrative arrangements notified by the United States had
been bilaterally agreed between United States and Oman.
5. The TMB observed that the arrangements contained, inter alia , provisions related to product
coverage, spacing of exports, exchange of respective import and export data and cooperation in the
prevention of circumvention, including the provision enabling the United States to impose, in
particular circumstances, triple charges on quotas.  The TMB recalled that when it had examined the
administrative arrangements concluded by the United States with several WTO Members, inJune 1997,  the United States had provided written replies to the TMB’s request for clarification.
1  In
light of these replies, as regards the correct understanding of the product coverage of these
administrative arrangements, the TMB "took note of the precision provided by the United States
according to which only products subject to restraints under paragraph 1 of Article 2 were subject to
the administrative arrangements".2  Furthermore, "the United States had stated that when provisions of
the administrative arrangements were inconsistent with the ATC, the provisions of the ATC would
apply".  The TMB also recalled that with respect to the provisions on circumvention, contained in the
administrative arrangements concluded and notified by the United States, it had sought information as
to how such provisions were deemed necessary in relation to the implementation of any provision of
Article 2 of the ATC.  It had also asked for explana tions as to how these provisions, in particular that
enabling the importing Member to impose, in particular circumstances, triple charges on quotas,
would fit within the provisions of the ATC.  In repl y, the United States had stated that circumvention
often damaged a country's legitimate trade by making it impossible to administer effectively its
                                                     
1 See G/TMB/N/271/Add.1.
2 See G/TMB/R/31, paragraph 10.G/TMB/R/78
Page 2
Article 2.1 quotas.  The United States and the Members concerned had deemed the circumvention
provisions to be necessary for the implementation of these quotas.  Triple charging, which had been
agreed upon in most of the administrative arrangements, had also been deemed by the United States
and the respective Members to be a necessary deterrent to circumvention.  Since its application would
affect the restraint levels contained in the US' Article 2.1 notifications, these particular provisionswere, in the view of the United States, appropriately included in the administrative arrangements.
6. Noting that all the provisions of the administ rative arrangements, including those related to
cooperation in the prevention of circumvention, had been agreed between the Members concerned, the
TMB had observed that Article 5 contained detailed descriptions of the rules and procedures to be
followed.  The TMB had noted, inter alia , that Article 5.4 seemed to provide some flexibility in terms
of remedies or agreed actions that could be foreseen in cases when circumvention had occurred.  It
had observed, however, that Article 5 contained no reference to the possibility for the importingMember to impose triple charges on quotas, as a deterrent to circumvention.  The TMB had noted, in
this regard, that this provision had not been utilized by the United States.  The TMB had recalled that
the United States had stated that when provisions of the administrative arrangements were
inconsistent with the ATC, the provisions of the ATC would apply.  The TMB had understood that
this statement applied to each and every provision of the arrangements notified.  The TMB hadexpected, therefore, that all the provisions of these administrative arrangements, including those
related to circumvention, would be implemented by the respective Members in conformity with the
relevant provisions of the ATC.
3
7. In light of the above, the TMB sought confirmation from the United States of its
understanding that the statements made by the United States, as mentioned in paragraphs 5 and 6, alsoapplied to the administrative arrangements concluded between the United States and Oman.  The
United States confirmed the Body's understanding.
8. The TMB decided to circulate these administrative arrangements to WTO Members for their
information.
Preparation for the TMB’s 2001 Comprehensive Report Pursuant to Article 8.11 of the ATC
9. The TMB continued its consideration of the draft of certain portions of its comprehensive
report pursuant to Article 8.11.  In that context it reverted to its consideration of the responses
received from several Members to the request for notifications and information sent to WTO
Members
4, and reviewed further replies provided in response to questions and comments it had sought
from certain Members.
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3 See G/TMB/R/31, paragraphs 20 and 21.
4 See G/TMB/24.