WORLD TRADE WT/DS85/1
ORGANIZATION G/RO/D/1
G/TBT/D/13
3June1997
(97-2282)
Original: English
UNITED STATES -MEASURES AFFECTING
TEXTILES AND APPAREL PRODUCTS
Request forConsultations bytheEuropean Communities
Thefollowing communication, dated 22May1997, from thePermanent Delegation ofthe
European Commission tothePermanent Mission oftheUnited States andtotheDispute Settlement
Body, iscirculated inaccordance withArticle 4.4oftheDSU.
__________________
Myauthorities haveinstructed metorequest consultations withtheUnited States ofAmerica
pursuant toArticle 4oftheUnderstanding onRules andProcedures Governing theSettlement of
Disputes, Article 8.4oftheAgreement onTextiles andClothing, Article 7oftheAgreement onRules
ofOrigin, Article 14oftheAgreement onTechnical Barriers toTrade (TBT Agreement) andArticle
XXII oftheGeneral Agreement onTariffs andTrade 1994(GATT 1994) regarding thechange toUS
rules oforigin fortextiles andapparel products.
TheUnited States ofAmerica hasintroduced changes toitsrulesoforigin fortextile andapparel
products, which entered intoforceon1July1996. Some oftheserules, inparticular therulescontained
inSection 334oftheUruguay Round Agreements Actandimplemented through customs regulation,
adversely affect exports ofEuropean Community fabrics, scarves andother flattextile products tothe
United States ofAmerica. Asaresult ofthischange, European Community products arenolonger
recognized intheUSAasbeing ofECorigin andlosethefreeaccess totheUSmarket thattheyenjoyed
before.
TheEuropeanCommunityconsidersthatthesechangesarenotinconformitywiththeobligations
oftheUnited States under theWTO Agreement onTextiles andClothing. Article 2.4oftheAgreement
onTextiles andClothing requires thatnonewrestriction interms ofproducts orMembers shallbe
introduced. Article 4.2ofthesame Agreement prescribes thattheintroduction ofchanges inthe
implementation oradministration ofrestrictions notified totheWTO shallnot:upset thebalance of
rights andobligations between theMembers; adversely affect theaccess available toaMember; impede
thefullutilisation ofsuchaccess; ordisrupt trade under theAgreement. TheEuropean Community
isoftheviewthatthechange inUSrulesoforigin causes precisely those effects andthattheUnited
States should haveinitiated consultations withtheEuropean Community prior totheimplementation
ofsuchchanges, inaccordance withArticle 4.4oftheAgreement.
Moreover,theEuropeanCommunityquestionsthecompatibilityoftheabove-mentionedchanges
inUSrules oforigin withArticle 2oftheAgreement onRules ofOrigin which contains disciplines
thataMember mustabide bywhen changing itsrulesoforigin during thetransitional period. These
disciplines prescribe, inter alia,that"...(b) therules arenotusedasinstruments topursue trade
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objectives, directly orindirectly, (c)theyshallnotthemselves create restrictive, distorting ordisruptive
effects oninternational trade, (...)and(e)theyareadministered inaconsistent, uniform, impartial
andreasonable manner". TheEuropean Community isoftheviewthatthenewUSrules oforigin
donotrespect suchrequirements.
Finally, theEuropean Community isoftheviewthattheUSrequirements oncountry oforigin
marking correspond toatechnical regulation asdefined inAnnex ItotheTBTAgreement and,as
applied sincethechanges totheUSrulesoforigin, donotguarantee toimported Community products
atreatment equivalent totheonegranted todomestic products. Thisdifference intreatment isnot
compatible withArticle IIIofGATT 1994 andArticle 2oftheTBTAgreement.
TheEuropean Community looks forward toreceiving yourreply tothisrequest andtofixing
amutually acceptable dateforconsultations.