WORLD TRADE
ORGANIZATIONG/TMB/R/76
13 June 2001
(01-2909)
Textiles Monitoring Body
REPORT OF THE SEVENTY-SEVENTH MEETING
1. The Textiles Monitoring Body held its seventy-seventh meeting on 7 and 8 May 2001.
2. Mr. Ivan Lee (Hong Kong, China) was appointed member to replace Mr. John C.Y. Leung
(Hong Kong, China).  Mr. Lee appointed Mr. Ho-Young Ahn (Korea) as his first alternate, and
Mr. Abdul Mannan (Bangladesh) as his second alternate.  Mr. Moriya appointed
Mr. Shingo Yamagami (Japan) as his alternate.
3. Present at this meeting were the following members, alternates and observer:
Messrs. Fox-Drummond Gough/Ugarriza/Rosas; Kalu; Kiener/Karapinar; Kumar; Lee; Moriya;
Moroz; Richards; Tagliani.
4. The TMB adopted the report of its seventy-sixth meeting (G/TMB/R/75).
Notification under Article 6.1 of the ATC
5. The TMB took note of the notification made pursu ant to Article 6.1 by Estonia that it wished
to retain the transitional safeguard provided for in Article 6.1 (G/TMB/N/393).
Notification under Articles 2.6 and 2.7(b)
6. The TMB reviewed under Article 2.21 the notification made, pursuant to Articles 2.6 and
2.7(b), by Estonia (G/TMB/N/394).  The TMB noted that the volume of the products integratedamounted to 16.15 per cent of the volume of imports into Estonia in 1994 of the products falling
under the coverage of the Agreement.  The TMB also noted that the products integrated included, in
accordance with Article 2.6, products from each of the four groups: tops and yarns, fabrics, made-up
textile products and clothing.  With respect to the fact that, the calculation of the share of the products
integrated had been made on the basis of a different base year, other than 1990, the TMB took note of
the statement by Estonia that this year represented the first fully reliable statistical year based on HS
in Estonia.
Notification under Articles 2.8(a) and 2.11
7. The TMB reviewed under Article 2.21 the notification made, pursuant to Articles 2.8(a) and
2.11, by Estonia (G/TMB/N/395).  The TMB noted th at the volume of the products integrated
amounted to 17.13 per cent of the volume of imports into Estonia in 1994 of the products falling
under the coverage of the Agreement.  The TMB also noted that the products integrated included, inaccordance with Article 2.8(a), products from each of the four groups:  tops and yarns, fabrics, made-
up textile products and clothing.  With respect to the fact that, the calculation of the share of the
products integrated had been made on the basis of a different base year, other than 1990, the TMB
took note of the statement by Estonia that this year represented the first fully reliable statistical year
based on HS in Estonia, and that Estonia had followed the same approach as for the notification it hadmade pursuant to Articles 2.6 and 2.7(b).G/TMB/R/76
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Notifications under Articles 2.8(b) and 2.11
8. The TMB reviewed under Article 2.21 the notifications made, pursuant to Articles 2.8(b) and
2.11, by the United States (G/TMB/N/360 and Adds.1 and 2).  It noted that, in accordance with
Article 2.8(b), the volume of imports to be integrated amounted to 18.11 per cent of the total volumeof imports into the United States in 1990 of the products falling under the coverage of the Agreement.
Products from each of the four groups referred to in Article 2.8(b) would be integrated, and would
represent the following percentages of the volume of  imports in 1990 in the United States:  tops and
yarns (3.26 per cent), fabrics (3.91 per cent), made-up textile products (8.40 per cent) and clothing
(2.55 per cent).  The TMB noted that the United States would integrate products from
41 US categories, of which four of tops and yarns, five of fabrics, eight of made-up textile products
and 24 of clothing.  The TMB further noted that, products from 38 US categories with respect towhich the United States maintained restrictions under Article 2.1 had been included in the integration
programme and that, therefore, restrictions affecting such products would be eliminated on
1 January 2002.  Restraints on these products affected overall 20 WTO Members.  Some of the
restraints would be fully eliminated because they constituted specific limits covering single or merged
categories which would be integrated in their entirety.  In a number of other cases, products includedin the programme of integration formed only part of product categories, therefore, restrictions
affecting such categories would be only partially eliminated.  In several other cases, the category
integrated was, prior to its integration, subject to  a quantitative restriction because, although the
category itself was not under specific limit, it fell under an aggregate or group limit.  As regards, the
HS lines in the notification which correspond to products described in the Annex of the ATC as "ex"positions of HS 6-digit lines, the TMB noted the confirmation by the United States that the trade
attributed to such HS lines corresponded precisely to products covered by the ATC.  With respect to
the fact that several HS lines (at the 10-digit level) included in the notification had already been
included in the US' integration programme for Stage 2, albeit  with a different product description,
under a different product category and with diff erent trade data, the TMB took note of the
US' statement that, in order to achieve integration of a category or part of a category, in some cases
the respective US imports in 1990, expressed in terms of HS 1990, had to be prorated using 1994
trade data.  Thus, an individual 1990 HS line item could appear more than once in the integration
schedule.  As to the consequences of the integration of the products listed as imports into the
United States of products forming only part of a category or subject to group or aggregate limits, the
TMB noted the US' statement that the United States "will be in contact with [its] textiles agreement
partners during the course of this year [i.e. 2001], concerning the effects of integration in the year2002 on specific, group and aggregate limits.  Adjustment to limits will be based on trade that has
occurred in the products to be integrated, and [the United States'] agreements partners will be given
the opportunity to consult with [the United States] on this issue".  In this regard the TMB recalled
that, in conformity with the provisions of Article 4,  any change in the level of such restrictions shall
not adversely affect the access available to a Member and upset the balance of rights and obligationsof the Members concerned under the ATC.  The TMB observed that the products integrated were
subject, prior to their integration, to visa requirements, and sought confirmation that no visa
requirements would be applied to any of the products integrated into GATT 1994 as a result of the
Stage 3 integration programme as from 1 January 2002.  The United States stated in this regard that "a
decision will be made later this year, after consultation with our bilateral textile visa arrangementpartners, as to whether or not a visa requirement will be retained for goods exported in 2002 that were
integrated in that year".  The TM B recalled that the respective visa arrangements had been notified to
the TMB by the United States, pursuant to Article 2.17, as parts of administrative arrangements and
that, under Article 2.17, administrative arrangements could only be deemed necessary in relation to
the implementation of restrictions applied under Article 2.  The TMB further recalled that, inJune 1998, several WTO Members had requested the TMB to review, in accordance with Articles 8.1
and 2.21, the implementation of the Stage 2 integration programme of the United States with respect
to the continuation of visa requirements for products included in this programme.  In that context, the
TMB had, inter alia , taken note of a communication by the United States, that as a definitive response
to the issues raised "without conceding its right to  maintain such measures, the United States […]G/TMB/R/76
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would eliminate visa requirements with respect to products integrated in Stage 2, without condition
and as soon as practicable, but in any event no later than 31 December 1998".  It was the TMB’s
understanding that such elimination of visa requirements would be effected on a MFN basis.1
Subsequently, the United States had forwarded to the TMB, for its information, a US Federal Register
Notice "eliminating the visa requirements for various textile categories, consistent with the TMB'sdecision on this matter".
2  Against this background, the TMB expected that it would be informed as
soon as possible of the outcome of any follow-up consideration to be given to this matter by the
United States.
9. The TMB reviewed under Article 2.21 the notifications made, pursuant to Articles 2.8(b) and
2.11, by the Dominican Republic (G/TMB/N/ 386/Rev.1), Estonia (G /TMB/N/396), Indonesia
(G/TMB/N/381/Rev.1) and Malta (G/TMB/N/382/Rev.1).  The TMB noted that, in accordance with
Article 2.8(b) the volume of the products integrated amounted to the following percentages of 1990imports of the products falling under the coverage of the Agreement (unless otherwise specified):
Dominican Republic (18.01 per cent of 1991 imports), Estonia (18.27 per cent of 1994 imports),
Indonesia (18.00 per cent) and Malta (31.39 per cent).  With respect to the Dominican Re public, the
TMB observed that the integration programme contained four products corresponding to
"ex HS lines" in the Annex to the ATC and took note of its statement:  that the notification was basedon the Brussels Tariff Nomenclature (BTN) before being transposed to the Harmonized System (HS);
that there were no "ex-HS lines" in the Dominican Republic's tariff structure;  and that on switching
from the BTN to the HS, the Dominican Republic had found that these lines in the national tariff
corresponded most closely to the descriptions in the corresponding lines of the Annex to the ATC.  As
regards Malta, the TMB observed that the integration programme contained 14 products defined as"ex HS lines" in the Annex to the ATC and that even if all the imports of such lines were not counted
in the volume of imports of the products to be in tegrated, that volume would still amount to not less
than 18 per cent of the total volume of Malta's 1990 imports of the products in the Annex, as
envisaged in Article 2.8(b).  The TMB also noted that, in each notification, in accordance with
Article 2.8(b), the products integrated included products from each of the four groups: tops and yarns,fabrics, made-up textile products and clothing.  With regard to those notifications mentioned above,
for which the calculation of the share of the products integrated had been made on the basis of a
different base year, other than 1990, the TMB ensured that no better data were available and that the
Members concerned had followed the same approach as for the notifications they had made pursuant
to Articles 2.6 and 2.7(b), as well as 2.8(a) and 2.11.
10. The TMB started its review under Article 2.21 of the notification made, pursuant to
Articles 2.8(b) and 2.11 by El Salvador.  It decide d to seek clarification from El Salvador as to
whether (i) some of the products scheduled to be integrated fell under the coverage of the ATC, (ii)
some of the products included in the programme had already been integrated in Stages 1 or 2, (iii) the
programme notified met the requirements of Article 2.8(b), in terms of the percentage of
El Salvador's 1990 imports of the products in the Annex to the ATC to be integrated.
Notification under Article 3.2(b) of the ATC
11. The TMB considered a notification received from Japan pursuant to Article 3.2(b), regarding
the progressive phase-out of the measures notified by Japan under Article 3.1
3, affecting the
importation of silk yarn and silk fabric from Korea.  According to the notification, based on the
Uruguay Round Agreement on Agriculture, import restrictions applied to imports into Japan of raw
silk, from which silk yarn and silk fabric are made, were converted into ordinary customs duties in1995 and this tariff equivalent would be maintained until the WTO agricultural negotiation is
concluded.  Therefore, Japan was not in a position to review the necessity to maintain these measures.
                                                     
1 See G/TMB/R/45, paragraphs 53 to 63.
2 See G/TMB/R/51, paragraph 37.
3 See G/TMB/N/82 and Add.1.G/TMB/R/76
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It, therefore, postponed such a review and decided to maintain the present measures.  The TMB
recalled that in its first notification pursuant to Article 3.2(b), made in June 19954, Japan had stated,
inter alia , that "before the end of the implementation period of the Agreement on Agriculture
(hereinafter 'implementation period') …, i.e. 31 March 2001, Japan will review the necessity to further
maintain the measures concerning importation of silk products from … Korea", and also that "shouldit be decided that the measure related to Korea are to be further maintained even after the
'implementation period' is over, trade level with Korea, thereafter, will be annually increased from the
level of the preceding year, until the phase out is completely achieved within the duration of the
Agreement on Textiles and Clothing".  In taking note of this notification, the TMB recalled that,
pursuant to Article 3.2(b), and to the related commitment undertaken by Japan, these measures had to
be completely phased out over the duration of the ATC.  Furthermore, the TMB reiterated its
expectation that the implementation of the cont inued phase-out programme, in conformity with
Article 3.2(b), would be such as to provide appropriate progressive increases to the level of
restrictions on imports of silk yarn a nd silk fabric from Korea (G/TMB/N/399).
Preparation for the TMB’s 2001 Comprehensive Report Pursuant to Article 8.11 of the ATC
12. The TMB started its consideration of the responses received from several Members to the
request for notifications and information sent to WTO Members
5, in the context of the preparation for
the Body's comprehensive report pursuant to Article 8.11.  It decided to put questions and invite
comments from several Members with respect to so me of the elements contained in the responses
received.
13. The TMB decided to request the WTO Secretariat to provide Members with background
statistical information with respect to trade in textil es and clothing, in time for the major review to be
conducted by the Council for Trade in Goods, pursuant to Article 8.11, before the end of 2001.
Observations with Respect to Late Notifications
14. With respect to notifications addressed to the TMB after the relevant deadlines, the TMB
reiterated that its taking note of late notifications was without prejudice to the legal status of such
notifications.
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4 See G/TMB/N/175.
5 See G/TMB/24.