WORLD TRADE G/TMB/R/19
8November 1996
ORGANIZATION(96-4756)
Textiles Monitoring Body
REPORT OFTHE TWENTIETH MEETING
1. TheTextiles Monitoring Body helditstwentieth meeting on29and30October 1996.
2. Present atthismeeting werethefollowing members andalternates: Messrs. Berz/Richards;
Kacar; Malik/Lam; Saeki; Suboh; Tagliani; Tong; Vanerio andWentzel.
Notifications under Articles 2.6and2.7(b) oftheAgreement onTextiles andClothing (ATC)
3. TheTMB reviewed under paragraph 21ofArticle 2thenotification made, pursuant to
paragraphs 6and7(b)ofArticle 2,byEgypt. During thisreview theTMB noted that,inaccordance
withparagraph 6ofArticle 2,thevolume ofproducts integrated byEgypt amounted to16.13 percent
of1990 imports oftheproducts falling under thecoverage oftheAgreement. TheTMB alsonoted
that,inaccordance withparagraph 6ofArticle 2,theproducts integrated included products fromeach
ofthefourgroups: topsandyarns, fabrics, made–uptextile products andclothing (G/TMB/N/196).
4. TheTMB began itsreview ofthenotification made bySouth Africa pursuant toparagraphs 6
and7(b)ofArticle 2and,seeking further information andclarification, decided torevert toitata
laterstage.
Notification under Article 6.1oftheATC
5. TheTMBtooknoteofthenotificationmadepursuanttoparagraph1ofArticle6byBurkinaFaso
thatitwished toretain therighttousetheprovisions ofArticle 6(G/TMB/N/198).
Notification under Article 6.9oftheATC
United States/El Salvador: imports ofcotton andman-made fibre skirts (UScategory 342/642)
6. Pursuant toparagraph 9ofArticle 6,theTMB reviewed thenotifications bytheUnited States
andElSalvador ofarestraint measure agreed between thetwoMembers onimports ofcotton and
man–made fibre skirts (UScategory 342/642) from ElSalvador. According tothisnotification a
transitional limitof500,000 dozen (notional annual level: 658,845 dozen) wasagreed fortheperiod
29March to31December 1996. Therollback level envisaged inparagraph 8ofArticle 6was
209,563 dozen. For1997, aspecific limit wassetat337,500 dozen, andaGuaranteed Access
Level (GAL)1of400,000 dozen wasestablished. For1998andtheremaining period of1999theannual
growth forthespecific limitwassetat6percent, andtheGAL atthelevelof400,00 dozen;2the
measure wasagreed forathree-year period, i.e.until28March 1999.
1Guaranteed Access Levels (GALs) arequantities ofproducts ofacategory thatacountry canexport tothe
United States provided theactual product shipped qualifies forsuch treatment, inter alia, bybeing made of
"UScomponents".
2Fortheperiod 1January to28March 1999, boththespecific limit andtheGAL areprorated.G/TMB/R/19
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7. TheTMB, while examining thespecific andrelevant factual information (market statement)
made available bytheUnited States toElSalvador during thebilateral consultations, observed that
considerable efforts hadbeenmade bytheUnited States tomatch thedataasclosely aspossible to
therequirements ofparagraphs 2,3and4ofArticle 6.
8. TheTMB noted thatthevolume ofimports intotheUnited States ofproducts of
category 342/642, from allsources, hadincreased in1993 and1994, andhadcontinued toincrease
in1995. Thishadtaken place inthecontext ofaproduct subject toquantitative restrictions foralarge
number ofcountries, including some small suppliers inthiscategory.
9. TheTMBobservedthatcertaineconomicvariablessuchasthedecliningUnitedStates’domestic
production, thereduction oftheshare oftheUnited States ’market heldbydomestic manufacturers
toarelatively lowlevel, thedecrease inemployment, particularly in1994and1995, andthepressure
putondomestic prices byimports prices, indicated thattheUnited States ’industry producing cotton
andman-made fibres skirts wasexperiencing problems asaresult ofincreased imports. Ontheother
hand, some other economic variables, inparticular theevolution ofaverage wages perworker, could
pointtoadifferent direction. Withrespect tosomeothervariables, theTMB noted thatexports remained
atalowlevelandweredeclining; productivity hadremained stable despite reductions inemployment.
Dataonsome elements, supplied atahigher levelofindustry aggregation, suchas,forexample, profits,
investment, inventories andcapacity utilization, could notprovide sufficient guidance. TheTMB
concluded that,taking intoaccount theelements mentioned above, thecircumstances described in
paragraph 2ofArticle 6wereobserved intheUnited States 'market forcotton andman-made fibre
skirts.
10. TheTMB further observed thatimports ofproducts ofcategory 342/642 intotheUnited States
fromElSalvador hadincreased significantly, particularly in1995. Thiswastaking place inthecontext
ofincreased imports from several other sources, bothrestrained andun-restrained, whose share of
overall imports waslarger thanthatofElSalvador. ElSalvador ’sexports werehowever, onaverage,
priced substantially below theUSaverage domestic price and,withoneexception, below theaverage
prices ofimports fromcountries withahigher share ofimports. TheTMB therefore considered that
thecircumstances described inparagraph 2ofArticle 6could beattributed toincreased imports from
ElSalvador.
11. TheTMB noted thatthetotalleveloftheagreed restraint, aswellasthatportion oftherestraint
thatwasavailable unconditionally toElSalvador (i.e.thespecific limit), weresubstantially above the
rollback level. Itobserved thatnogrowth ratewasprovided forwithrespect totheGAL. However,
keeping alsoinmind indications given bytheUnited States Government thatGALs canbeincreased
onrequest, itistheTMB'sunderstanding andrecommendation thattheGAL willbeincreased byno
lessthan6percentannually.
12. Onthebasis oftheconsiderations mentioned above, theTMB concluded thatthisrestraint
measureagreedbetweentheUnitedStatesandElSalvadorwasjustifiedinaccordancewiththeprovisions
ofArticle 6oftheAgreement onTextiles andClothing (G/TMB/N/199 andG/TMB/N/200).
Discussion onavailability ofinformation pertaining totheapplication ofGATT 1994 rules and
disciplines
13. TheTMB continued itsdiscussion related totheavailability ofinformation pertaining tothe
application ofGATT 1994 rules anddisciplines asdefined inArticle 7,inthecontext ofthe
comprehensive report theTMB isduetosubmit totheCouncil forTrade inGoods in1997 onthe
implementation oftheATCduring itsfirststage. Itdecided torevert toitatitstwenty-second meeting.G/TMB/R/19
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Observations withrespect tolatenotifications
14. With respect tonotifications addressed totheTMB aftertherespective deadlines foreseen in
theATC, theTMB reiterated thatitstaking noteoflatenotifications waswithout prejudice tothelegal
status ofsuchnotifications.