RESTRICTED
WORLD TRADE G/L/97
25July1996
ORGANIZATION(96-2974)
Original: English COUNCIL FOR TRADE INGOODS
IMPLEMENTATION OFTHE AGREEMENT ONTEXTILES AND
CLOTHING AND RELATED MATTERS
Thefollowing communication, dated 24July1996, hasbeenreceived from theEuropean
Communities.
_______________
GENERAL DISCUSSION OFTEXTILES ISSUES
1. Introduction
TheCouncil forTrade inGoods (CTG) should certainly feelabletodiscuss anytextiles issue
itwishes. However, given theverygreat importance oftheTextiles Monitoring Body (TMB) asa
WTO institution, theCTG should becareful nottointerfere withitsfunctioning. Since theTMB has
theprimary responsibility, under Article 8(1)oftheAgreement onTextiles andClothing (ATC), for
monitoring theimplementation oftheATC, andsince itisdoing itsownreport fortheSingapore
Ministerial tobeincorporated intothatoftheCTG, theCTG should notdiscuss atthisstage theissues
which theTMB willaddress. Inanyevent, inaccordance withArticle 8(11) oftheATC, theTMB
hastotransmit totheCTG "acomprehensive report ontheimplementation oftheATC" before the
endofthefirsttransition stage nextyear-soopportunities fortheCTG todiscuss textiles issues at
various stages arealready foreseen bytheATC andtherefore thecurrent exercise isadditional tothat.
Thisnotwithstanding, some oftheissues raised byPakistan could bediscussed nowwithin
theCTG, while others should onlybediscussed aftertheCTG hasreceived theTMB'sreport for
Singapore. Inaddition, theEuropean Community proposes twoother issues forthepresent CTG
discussion, namely, (a)market access, and(b)rules anddisciplines.
2. Issues proposed bytheEuropean Community
2.1. Market Access
Given thegreatimportance attached totheopening ofthetextiles markets ofallWTO Members,
theCTG should examine theextent towhich allcommitments entered intoduring themarket access
negotiations oftheUruguay Round, havebeencomplied with. Attention should alsobepaidtoany
instances where defacto market access hasbeenreduced through theraising ofapplied tariff rates
tothebound level. Ifnecessary, theCTG should request anyrelevant information from theMarket
Access Committee.G/L/97
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2.2 Rules anddisciplines
TheCTG should examine theextent towhich WTO Members havecomplied withanyGATT
1994 rulesanddisciplines having animpact ontrade inthetextiles sector andhaveadopted effective
measures toprevent circumvention andotherfraudulent trading practices. Ifnecessary, theCTGshould
requestrelevantinformationfromanyotherrelevantWTObodysuchasthosedealingwithanti-dumping,
balance ofpayments, subsidies and/or theprotection ofintellectual property.
3. Issues proposed byPakistan which could bediscussed bytheCTG now
Some oftheissues proposed byPakistan could indeed bediscussed atthisstage intheCTG
because theywould notbeappropriate topics fortheTMB todiscuss initsreport.
3.1 Integration -Stage 2(17%)
Inaccordance withtheprovisions ofArticle 2.8oftheATC, thechoice ofproducts tobe
integrated ateachintermediary stageisleftfreely toeachWTO Member. Thischoice can,withperfect
legitimacy, result inproducts being integrated which arenotsubject toanyquantitative restriction.
Under theprovisions ofArticle 2.14oftheATC, products which remain under restriction willbenefit
fromincreased growth rates; thiswillcontribute tocontinuous adjustments andincreased competition
onthemarkets ofimporting Members.
3.2 Functioning oftheTMB
TheCTG should recognise theroleandresponsibilities oftheTMB asestablished bytheATC
andshould further recognise thattheTMB hasdoneitsjobunder difficult circumstances.
3.3 Regionalism
TheCTG should recognise thatregionalism canbeneficially influence trade inoverall terms
through itsimpact onbothquantitative restrictions andtariffrates. Ifnecessary, theCTGshould request
anyrelevant information fromtheCommittee onRegional Trade Arrangements under Article XXIV.
3.4 UseofTrade Measures forNon-Trade Purposes
TheCTGshould examine theextent, ifany,oftheuseoftrademeasures fornon-trade purposes
which occurs outside alegalframework. Ifnecessary, theCTGshould request anyrelevant information
from other bodies.
4. Other issues raised byPakistan which should bediscussed bytheCTG later
Anumber oftheissues raised byPakistan should bediscussed bytheCTG lateron,afterthe
Council hashadthebenefit oftheTMB report onATC implementation which willaddress them. The
ATCclearlygivesprimarycompetencetotheTMBto"supervisetheimplementationofthisAgreement",
anditwould beanusurpation ofthatcompetence iftheCTG itself conducted suchareview ofATC
implementation inadvance oftheTMB having completed itsownreport.
Theissues falling intothiscategory areasfollows: Integration Stage 1(16%), useofthe
safeguard (Article 6),bilaterally agreed arrangements, thetreatment ofleastdeveloped countries and
small suppliers, theparticular interest ofcotton-producing countries, rules oforigin andother ATC
issues (OPT, special regimes, etc.).G/L/97
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5. Conclusion
While theCTG should address allofthese issues atsome point intime, itshould notdiscuss
certain issues prematurely because thiswould betousurp thecompetence oftheTMB inclear
contradiction oftheATC which gives theprimary competence totheTMB forthemonitoring ofATC
implementation.
Given thattheTMB report isexpected inearly October there willbeample timefortheCTG
todiscuss itscontents atthatstage. Indeed, special CTGmeetings solely todiscuss textiles issues would
befarmore useful thenrather thannow.