RESTRICTED
WORLD TRADE G/C/W/100
17November 1997
ORGANIZATION(97-5032)
Original: English Council forTrade inGoods
ELEMENTS FOR CONSIDERATION INMAJOR REVIEW OFTHE IMPLEMENTATION
OFTHE AGREEMENT ONTEXTILES AND CLOTHING (ATC)
Communication from Colombia1
Thefollowing communication hasbeenreceived from thePermanent Mission ofColombia
onbehalf ofmembers oftheITCB thatarealsoMembers oftheWTO, forcirculation toMembers.
_____________
Assessment oftheApplication ofTransitional Safeguard Actions
Tables
1. Position ofUSTransitional Safeguard Actions
(UptoendAugust 1997) Table I
2. TMB Review ofAgreed Restraint Measures:
Summary ofTMB Observations Table II
3. Trade Affected byUSTransitional Safeguard Actions Table III
4. Status ofUSTransitional Safeguard Actions Table IV
1Circulated initially asanon-paper intheCouncil forTrade inGoods meeting of20October 1997.G/C/W/100
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Assessment oftheApplication ofTransitional Safeguard Actions
Article6oftheATCprescribedthefollowingconditionsforapplicationoftransitionalsafeguard
actions:
- Thatthese should beapplied assparingly aspossible; and
- Thattheyshould beapplied consistently withtheprovisions ofArticle 6andtheeffective
implementation oftheintegration process.
Itisessential toassess theapplication oftransitional safeguard actions onthebasis ofthese
conditions, i.e.whether itmeasures uptothese requirements.
Table ItoIVofthisnon-paper arepresented toenable anassessment oftheapplication of
safeguard actions bytheUS,accordingly.
- Other WTO Members which maintained QRsunder theMFA didnotinvoke Article 6ofthe
ATC during thefirststage.
Table Ishows that:
- Except fortheeight bilaterally agreed restraint measures, mostoftheactions havehadtobe
rescinded bytheUS.
- None oftheactions challenged before theTMB and/or thedispute settlement panels wasfound
tobejustified.
Table IIshows thatoutoftheeightbilaterally agreed restraint measures, onlyinonecasethe
TMB clearly observed thattheagreement wasjustified inaccordance withArticle 6.
Table IIIshows that:
- Asubstantial portion ofadditional trade wasaffected bytheapplication ofsafeguard actions.
- Inthisregard theTMB hasalsonoted thatit"isaware oftheimplications fortradeofrequests
forconsultations made withaview tointroducing safeguard measures, inparticular, when
transitional measures were applied andsubsequently rescinded" (paragraph 174ofthe
Comprehensive Report refers).
Conclusion:
Onthebasis ofthisinformation itcanbeconcluded, ashasalsobeendonebytheTMB in
paragraph 176ofitsComprehensive Report, that"The examination oftherequests forconsultations
andoftheresulting measures made bytheTMB and,insome cases, subsequently, DSBpanels, led
totheconclusion thatinmostcases theUnited States didnotcomply withimportant obligations arising
from Article 6."G/C/W/100
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TABLE I
Position ofUSTransitional Safeguard Actions
(UptoendAugust 1997)
Number
1.Calls issued 27
2.Calls withdrawn without action 2
3.Restraint measures withdrawn
ofwhich:
After unilateral restraints 11
After bilateral agreements 3
After DSBrecommendations 216
4.Calls pending 1
5.Bilateral restraints inforce 8
Note: fordetails seeTable IV
Observations:
Itisnoteworthy that,except fortheeight bilaterally agreed restraint measures videserial
number 5above, most oftheactions havehadtoberescinded bytheUS.
None oftheactions challenged before theTMB and/or thedispute settlement panels wasfound
tobejustified.
With respect totheeightbilaterally agreed restraint measures, reference mayplease bemade
toTable II.G/C/W/100
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TABLE II
TMB Review ofAgreed Restraint Measures
Summary ofTMB Observations
1. TMB recalled that,inasimilar case, ithadfound no
serious damage butcould notreach consensus onactual
threat5cases
2. While some datapointed todivergent directions,
agreement wasjustified inoverall terms2cases
3. Agreement wasjustified inaccordance withArticle 6 1case
Observation:
Itmaybeseenthatonlyinonecase,theTMB clearly observed thattheagreement wasjustified
inaccordance withArticle 6.G/C/W/100
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TABLE III
Trade Affected byUSTransitional Safeguard Actions
1995
Volume: Million SME
Value: Million $
Volume Value
Product Category US
ImportsImports from
countries subject
tosafeguard calls(4)as
%of
(3)US
ImportsImports from
countries subject
tosafeguard calls(7)as
%of
(6)
(1) (2) (3) (4) (5) (6) (7) (8)
Skirts 342/642 137.8 8.4 6.1 714.6 36.0 5.0
Nightwear 351/651 518.4 52.7 10.2 780.3 55.6 7.1
Underwear 352/652 1,285.2 639.3 49.7 1,471.9 622.1 42.3
Suit-type c
oats 434 6.1 1.2 19.7 73.0 6.2 8.5
Coats 435 59.6 2.0 3.4 487.9 11.6 2.4
Shirts and
Blouses 440 1.9 0.7 36.8 15.3 3.2 20.9
Suits 440 5.2 0.5 9.6 100.7 5.0 5.0
Yarn 603 77.9 6.6 8.5 46.0 3.3 7.2
Luggage 670-L 358.0 133.9 37.4 836.1 243.6 29.1
TOTAL 2,450.1 845.3 34.5 4,525.8 986.6 21.8
Source: USDepartment ofCommerce, Major Shippers Report, involume andvalue, December 1996.
Observations:
Thetableshows thatasubstantial portion oftradewasaffected bytheapplication ofsafeguard
actions.
Inthisregard theTMB hasnoted thatit"isaware oftheimplications fortrade ofrequests
forconsultations made withaviewtointroducing safeguard measures, inparticular, when transitional
measureswereappliedandsubsequentlyrescinded"(paragraph174oftheComprehensiveReportrefers).G/C/W/100
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Category Product Exporter Natures of
MeasureTMB Findings Outcome
/n3/n4/n2/CP/n6/n4/n2 Skirts Guatemala agreed restraint While some data pointed to divergent directions/CM agreement was
justified in overall terms/COrestraint in place
El Salvador unilateral restraint Restraint measure was subsequently agreed/CO Justified in
accordance with Article /n6/COrestraint in place
/n3/n5/n1/CP/n6/n5/n1 Nightwear Honduras unilateral restraint No serious damage/CM no actual threat/CO Recommendation/DK US
should rescind/COrescinded
Costa Rica unilateral restraint Before its review/CM TMB informed of US decision to rescind/CO rescinded
El Salvador agreed restraint Subsequently US informed TMB of its decision to rescind/CO TMB
took note/COrescinded
Jamaica agreed restraint Subsequently US informed TMB of its decision to rescind/CO TMB
took note/COrescinded
/n3/n5/n2/CP/n6/n5/n2 Underwear Honduras unilateral restraint No serious damage/CM no consensus on actual threat/CO Recommended
/n3/n0 days consultations which resulted in agreed restraint/COrestraint in place
Costa Rica unilateral restraint No serious damage/CM no consensus on actual threat/CO Recommended
/n3/n0 days consultations/CO Noted ATC did not provide indication with
respect to the effective date for implementation of the measure/CODispute panel and
Appellate Body
found US measure
not consistent
with ATC/CO
Rescinded
Colombia agreed restraint Recalled that in Costa Rica and Honduras cases/CM it found no
serious damage but did not reach consensus on actual threat/COrestraint in place
Dominican
Republicagreed restraint Recalled that in Costa Rica and Honduras cases/CM it found no
serious damage but did not reach consensus on actual threat/CO
Noted that specific limit was lower than rollback level/COrestraint in place
El Salvador agreed restraint Recalled that in Costa Rica and Honduras cases/CM it found no
serious damage but did not reach consensus on actual threat/COrestraint in place
Turkey unilateral restraint During TMB review US/CPTurkey agreed a restraint/CO Recalled that
in Costa Rica and Honduras cases/CM it found no serious damage but
did not reach consensus on actual threat/COrestraint in place
Thailand unilateral restraint During its examination/CM TMB informed of US decision to rescind/CO
Thailand asked for TMB finding that US call was invalid as
product was under group limit/CO TMB decided to revert/COrescinded
/n4/n3/n4 Suit/CNtype
coatsBrazil call rescinded
India unilateral restraint No serious damage/CM no actual threat/CO Recommendation/DK US
should rescind/COrescinded
/n4/n3/n5 Coats India unilateral restraint No serious damage/CM no consensus on actual threat/CO Parties should
keep in mind that ATC silent whether import measure can be
continued/COSubsequently US
decided to rescind
Honduras unilateral restraint Subsequently agreed restraint/CO Recalled that in case of India/CM
found no serious damage but could not reach consensus on actual
threat/CO Noted elements of agreed restraint/CORestraint in place
On subsequent request by Honduras/CM TMB again reviewed and
noted it had not reached determination whether agreed restraint
was justified under Article /n6/CO Expected the US would reassess/COUS decided to
rescind the
measure
/n4/n4/n0 Shirts and
blousesIndia unilateral restraint No serious damage/CM but actual threat had been demonstrated/CO Subsequently/CM
measure rescinded
by US/CO Dispute
panel and
Appellate Body
ruled measure
violated ATC
provisions
Hong Kong unilateral restraint Noted that product already under a group limit/CO Found measure
not justified/CO Recommended US should rescind/COrescindedG/C/W/100
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Category Product Exporter Natures of
MeasureTMB Findings Outcome
/n4/n4/n4 Suits Colombia agreed restraint While some data might lead to different findings/CM agreement was
justifiable in overall terms/CO Noted specific limit lower than
rollback level/COrestraint in place
Philippines unilateral restraint Informed of US decision to rescind/CO Took note/CO rescinded
/n6/n0/n3 Yarn Thailand unilateral restraint Informed of US decision to rescind/CO Took note/CO rescinded
Thailand call issued again
end of August /n9/n7
/n6/n7/n0/CNL Luggage Thailand unilateral restraint Informed of US decision to rescind/CO Took note/CO rescinded
Philippines unilateral restraint Informed of US decision to rescind/CO Took note/CO rescinded
Sri Lanka agreed restraint Informed of US decision to rescind restraint measure/CO Took note/CO rescinded
/n3/n0/n1/CNpart Combed
cotton
yarnPakistan call rescinded rescinded