WORLD TRADE G/TMB/N/265
22July1997
ORGANIZATION(97-2989)
Original: English Textiles Monitoring Body
AGREEMENT ONTEXTILES AND CLOTHING
Notification under Article 2.17
UNITED STATES
Administrative Arrangements withBrazil
TheTextiles Monitoring Body hasreceived anotification fromtheUnited States pursuant to
paragraph 17ofArticle 2.TheTMB iscirculating thisnotification toWTO Members fortheir
information.G/TMB/N/265
Page2
Executive Office ofthePresident
Office oftheUnited States Trade Representative
28February 1997
TheHonourable Ambassador András Szepesi
Chairman
Textiles Monitoring Body
World Trade Organization
RuedeLausanne
1211 Geneva
Dear Ambassador Szepesi,
AttachedyouwillfindmyGovernment'snotificationofAdministrativeArrangementsforBrazil1,
Colombia, Costa Rica, Fiji,Haiti, Hungary, India, Indonesia, Korea, Macau, Malaysia, Philippines,
Qatar,Romania,SriLanka,Thailand,UAEandUruguaymadepursuanttoArticle2.17oftheAgreement
onTextiles andClothing.
Sincerely,
(signed) Ambassador RitaHayes
Chief Textile Negotiator
1ThisdocumentcontainstheAdministrativeArrangementsconcludedwithBrazil.AdministrativeArrangements
concluded withtheother Members listed above willbecirculated asseparate documents.
Note: Annex Breferred tointhetextcontains thelistofrestrictions notified bytheUnited States pursuant to
Article 2.1andassuch itisnotpartoftheAdministrative Arrangements.G/TMB/N/265
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BRAZIL
ThefollowingprovisionsaredrawnfromtheUnitedStates-Brazilbilateraltextileandapparelagreement
of4Mayand27June1994 andhavebeenagreed bytheUnited States andBrazil tobenecessary for
theproper implementation ofrestrictions notified totheTextiles Monitoring Body under Article 2.1
oftheAgreement onTextiles andClothing.
Coverage ofAgreement andClassification
2. Textiles andtextile products covered bythisAgreement arethose setforthinAnnex A.The
system ofcategories andtheratesofconversion intosquare meters (SME) listed inAnnex Ashall
apply inimplementing thisAgreement.
3. Tops, yarns, piecegoods, made-up articles, garments, andothertextile manufactured products,
allbeing products which derive theirchiefcharacteristics fromtheirtextile components ofcotton, wool,
orman-made fibreorblends thereof, inwhich anyorallofthose fibres incombination represent the
chiefweight oftheproduct, aresubject tothisAgreement. Forthepurposes ofthisAgreement, textile
products covered bythisparagraph willbeclassified as:
(A) Cotton textiles iftheproduct isinchief weight ofcotton, orifthecotton withwool and/or
man-made fibres intheaggregate equal orexceed 50percentbyweight ofthecomponent
fibres thereof andthecotton component equals orexceeds theweight ofeachofthetotalwool
and/or man-made fibrecomponents, unless theproduct isawoven fabric inwhich woolequals
orexceeds 36percentbyweight ofallfibres, inwhich casetheproduct willbeawooltextile.
(B) Wool textiles, iftheproduct isinchiefweight ofwool, or,inthecaseofproducts which are
chiefweight ofsilkornon-cotton vegetable fibres, woolexceeds 17percentbyweight ofall
fibres.
(C) Man-made fibretextiles, iftheproduct isinchiefweight ofman-made fibres, oriftheman-made
fibres incombination withcotton and/or wool intheaggregate equal orexceed 50percent
byweightofthecomponentfibresthereofandtheman-madefibrecomponentexceedstheweight
ofthetotalwool and/or cotton component, unless:
(I) Theproduct isknitted orcrocheted apparel inwhich woolequals orexceeds 23percent
byweight ofallfibres, inwhich casetheproduct willbeawool textile; or
(II) theproduct isapparel, notknitted orcrocheted, inwhich wool equals orexceeds
36percentbyweight ofallfibres, inwhich casetheproduct willbeawool textile;
or
(III) theproduct isawoven fabric inwhich wool equals orexceeds 36percentbyweight
ofallfibres, inwhich casetheproduct willbeawool textile.
Coverage under thisparagraph isintended tobeidentical withtheterms ofArticle 12ofthe
Arrangement Regarding International Trade inTextiles, andinconformance withparagraph 24
ofthe31July1986 Protocol ofExtension. Intheevent ofaquestion regarding whether a
product iscovered bythisAgreement byvirtue ofbeing chief weight cotton, wool, and
man-made fibre, thechief value ofthefibres maybeconsidered.G/TMB/N/265
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Merged Categories andConversion Factors
4. Forthepurpose ofthisAgreement, andinrecognition ofthepatterns oftrade between Brazil
andtheUnited States, thecategories below aremerged andtreated assingle categories, withrelevant
conversion factors, asindicated:
Categories Designation Conversion
Merged inAgreement Factor
300,301 300/301 8.5
317,326 317/326 1.0
334,335 334/335 34.5
338,339,638,639 338/339/638/639 10.0
342,642 342/642 14.9
347,348 347/348 14.9
410,624 410/624 1.0
445,446 445/446 12.4
647,648 647/648 14.9
Aggregate andSpecific Limits
5. Commencing withthefirstagreement period andduring thesubsequent termofthisAgreement,
theGovernment oftheFederative Republic ofBrazil shalllimit annual exports from Brazil tothe
United States ofcotton, wool andman-made fibretextiles andtextile products totheaggregate and
specific limits setoutinAnnex B,assuchlimits maybeadjusted inaccordance withparagraphs 6
and7.Theaggregate andspecific limits inAnnex Binclude growth, butdonotinclude flexibility
under paragraph 6inthecaseoftheaggregate limit, orunder paragraphs 6and7inthecaseofspecific
limits. Exports aresubject tolimits orlevels fortheagreement period inwhich exported.
Flexibility Adjustments
(Carryover/carry forward)
6.(A) Theextent towhich anyspecific limitsetoutinAnnex Bmaybeexceeded inanyagreement
period bycarryover (theuseofanyunused meterage (shortfall) ofthecorresponding limitfrom
theprevious period) and/or carry forward (borrowing aportion ofthecorresponding limitfrom
thesucceeding agreement period) iseleven (11)percent, ofwhich carry forward shallnot
constitute morethansix(6)percent. Theextent towhich anyaggregate limitsetoutinAnnex B
maybeexceeded inanyagreement period bycarryover orcarry forward shallbesubject to
consultations between thetwoGovernments. Consultations withaview toward facilitating
tradeshallbeheldwithin 30daysofreceipt oftherequest oftheGovernment oftheFederative
Republic ofBrazil.
(B) Forpurposes oftheAgreement, ashortfall occurs when exports oftextiles ortextile products
fromBrazil totheUnited States during anagreement period (plusanycharges forovershipments
made inthepreceding years) arebelow anyapplicable limit andaggregate limit setoutin
AnnexB,asdecreasedpursuanttoparagraphs6and7,oradjusteddownwardsforovershipments
orother mutually agreed uponamendments. Intheagreement period following theshortfall,
suchexports from Brazil totheUnited States ofAmerica maybepermitted toexceed theG/TMB/N/265
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applicable limits, subject toconditions setforthabove, bycarryover ofshortfall inthefollowing
manner:
(I) thecarryover shallnotexceed theamount ofshortfall inanyapplicable limit;
(II) theshortfall shallbeusedinthecategory inwhich theshortfall occurred.
(C) Nocarryover shallbeavailable forapplication during thefirstagreement period. Nocarry
forward shallbeavailable forapplication during thelastagreement period.
(Swing)
7.(A) During anyagreement period, within theapplicable aggregate limit, thespecific limits and
sub-limits setoutinAnnex Bmaybeexceeded bynotmore thansix(6)percentinaddition
toanyadjustments permitted under paragraph 6.TheGovernment oftheFederative Republic
ofBrazil mayindicate totheGovernment oftheUnited States ofAmerica thespecific limit(s)
andsub-limit(s) tobeincreased.
(B) Special shiftofanadditional sixpercentshallbeavailable from merged category 410/624
intothesub-limit for410.
(C) TheGovernment oftheUnited States agrees toprovide, attherequest oftheGovernment of
Brazil, "special shift" upto15percentofthereceiving category 347/348 withadeduction
oftwotimes theamount of"special shift" fromcategory 647/648. Thisspecial shiftmaybe
usedonlyonceduring anyagreement period andwillnoteffect thebaselevels asstated in
Annex Binthefollowing agreement period.
(Automatic Flexibility)
8. TheGovernment oftheUnited States ofAmerica mayapply flexibility under paragraphs 6
and7toanyspecific limitwhenever thatadjustment appears appropriate tofacilitate theflowoftrade
andthesound administration oftheAgreement. Totheextent thatsuchadjustments areactually utilized,
theywillbeimplemented bymeans ofcarryover, swing, andcarry forward, inthatorder. Anyunused
carry forward willbere-credited tothedonor limitandtheGovernment oftheFederative Republic
ofBrazil shallbenotified oftheamount tobere-credited.
Overshipment Charges
10.(A) Export fromtheGovernment oftheFederative Republic ofBrazil inexcess ofauthorized levels
inanyagreement period maybedenied entryintotheUnited States. Anysuchshipments denied
entry maysubsequently bepermitted entry intotheUnited States andcharged totheapplicable
limitinthesucceeding agreement period. TheGovernment oftheUnited States shallinform
theGovernment oftheFederative Republic ofBrazil ofanysuchcharges.
(B) Anyaction taken pursuant tothisparagraph shallnotprejudice therights ofeither Government
regarding consultations.
Spacing Provisions
11. TheGovernment oftheFederative Republic ofBrazil shalluseitsbestefforts tospace exports
totheUnited States within each category evenly throughout theagreement period, taking into
consideration normal seasonal factors.G/TMB/N/265
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USAssistance inImplementation oftheLimitation Provisions
12. TheGovernment oftheFederative Republic ofBrazil shalladminister itsexport control system
under thisAgreement. TheGovernment oftheUnited States ofAmerica mayassist theGovernment
oftheFederative Republic ofBrazil inimplementing thelimitation provisions ofthisAgreement by
controlling imports, bythedateofexport, oftextiles andtextile products covered bythisAgreement,
asvisaed bytheGovernment oftheFederative Republic ofBrazil inaccordance withtheVisa
Arrangement.
Exchange ofData
13. Upon request theGovernment oftheUnited States ofAmerica shall promptly supply the
Government oftheFederative Republic ofBrazil withmonthly dataonimports ofcotton, wool and
man-made fibre textiles andtextile products intotheUnited States from Brazil. Upon request the
Government oftheFederative Republic ofBrazil shall promptly supply theGovernment ofthe
United States ofAmerica withdataonmonthly exports ofcotton, wool andman-made fibretextiles
andtextile products from Brazil totheUnited States. Each Government agrees tosupply promptly
anyother available statistical datanecessary fortheimplementation oftheAgreement.
Mutually Satisfactory Administrative Arrangements
14. Mutually satisfactory administrative arrangements oradjustments maybemade toresolve minor
problems arising intheimplementation ofthisAgreement, including differences inpoints ofprocedure
oroperation.
Consultation onImplementation Questions
15. TheGovernmentoftheUnitedStatesofAmericaandtheGovernmentoftheFederativeRepublic
ofBrazil, upontherequest oftheother, agree toconsult onanyquestion arising intheimplementation
ofthisAgreement.
Cooperation inthePrevention ofCircumvention
18. TheGovernment oftheUnited States takes noteofthefactthatthere hasnotbeen any
documented cases ofcircumvention involving Brazil inrecent years. BothGovernments notethatthey
arewilling andprepared tocooperate witheachother inaddressing specific cases ofcircumvention.
Sincebothsidesareagreedthatcircumventionisnotdesirable,boththeGovernmentsoftheUnitedStates
andBrazil agree tothefollowing provisions:
(A) TheGovernment oftheUnited States andtheGovernment ofBrazil agree totakemeasures
necessary toaddress, toinvestigate and,where appropriate, totakelegaland/or administrative
action toprevent circumvention ofthisAgreement suchasbytransshipment, rerouting, false
declaration concerning country oforigin, orfalsification ofofficial documents.
(B) Bothparties agree tocooperate fully, consistent withtheirdomestic lawsandprocedures, in
instances ofcircumvention oralleged circumvention oftheAgreement toaddress problems
arising fromcircumvention andtoestablish therelevant factsintheplaces ofimport, export
and,where applicable, transshipment. Suchcooperation, totheextent consistent withdomestic
laws andprocedures, willinclude investigation ofcircumvention practices; exchange of
documents, correspondence, reports andother relevant information totheextent available;
andfacilitation ofjointplantvisits andcontacts byrepresentatives ofbothparties, uponrequest
andonacase-by-case basis. When either party wishes tovisitcertain plants, theparty seekingG/TMB/N/265
Page7
theplant visitorvisits shallgivewritten notice, including thereasons forsuchvisits, tothe
authorities oftheother Party (i.e., theUSCustoms authorities intheUSA ortheMinistry
ofIndustry, Commerce andTourism inBrazil) twoweeks inadvance. Theplants willnot
benotified inadvance ofthevisit. When thevisitoccurs, permission from aresponsible
representative oftheplant willbeobtained before thevisitiscommenced. Upon completion
ofsuchvisits during eachtrip,thevisiting party shall furnish areport totherespective
Government officials oftheother party onthevisits.
(C) Ifeither party believes thatthisAgreement isbeing circumvented, itmayrequest consultations
toaddress thematter ormatters concerned withaview toseeking amutually satisfactory
solution. Each party agrees toholdsuchconsultations promptly, beginning within 30days
ofthereceipt, byaparty, ofawritten request accompanied byanexplanation fortherequest
from theother party andconcluding within 90days, unless extended bymutual agreement,
andtocooperate fullyinterms oftheelements setoutinparagraph (B)above.
(D) Should theparties beunable inthecourse ofconsultations toreach asatisfactory solution within
theperiod specified inParagraph (C),thentheGovernments ofBrazil andtheUnited States
agree thattheUnited States mayintroduce arestraint, orwhere arestraint already exists, may
deduct fromthequantitative limits amounts notmore thantheamount oftransshipped products
ofBrazilian origin incases:
(I) where clearevidence regarding circumvention hasbeenprovided, bytheGovernment
oftheUnited States totheGovernment ofBrazil; or
(II) where theGovernment oftheUnited States hasprovided factual information tothe
Government ofBrazil demonstrating asubstantial likelihood thatcircumvention has
occurred andhasrequested from Brazil cooperation orinformation relevant tothe
possible circumvention thatisofatypethatisavailable toorcould reasonably be
obtained bytheGovernment ofBrazil andtheGovernment ofBrazil haswithout
adequate reason withheld suchinformation orcooperation; or
(III) where there isclearevidence showing thatgoods originating inanother country have
beenshipped through Brazil totheUnited States asthough theywereproducts ofBrazil.
TheUnited States andBrazil agree thattheremaybeshipments transiting through Brazil with
nochange oralterations made tothegoods contained insuchshipments inBrazil. Boththe
parties agree thatitmaynotbegenerally practicable forBrazil toexercise control oversuch
shipments.
(E) Should theUnited States finditnecessary toresort totheprovisions ofparagraph (D)(I)or
(II)todeduct anamount oramounts from thequantitative limits ofBrazil where repeated
instances ofcircumvention havebeendemonstrated within thecurrent orimmediately preceding
agreement year, thentheUnited States maydeduct from thequantitative limits amounts up
tothreetimes theamounts transshipped, provided thatsuchdeductions aredistributed equally
ineachofthethreefollowing years. Bothparties agree thattheabove provision willberesorted
tobytheUnited States onlyifnotlessthanthree instances ofcircumvention byBrazil have
beendemonstrated during thecurrent orimmediately preceding agreement yearandnoor
inadequate measures arebeing applied byBrazil toaddress theproblem ofrepeated
circumvention.
(F) Parties agree thatfalse declaration concerning fibre content, quantities, description or
classifications ofmerchandise alsofrustrates theobjective ofthisAgreement. Where there isG/TMB/N/265
Page8
clearevidence thatanysuchfalsedeclaration hasbeenmade forpurposes ofcircumvention,
bothparties agree totakeappropriate measures, consistent withtheir domestic lawsand
procedures, against exporters orimporters involved. Should either party believe thatthis
Agreement isbeing circumvented bysuch false declaration andthatno,orinadequate,
administrative measures arebeing applied toaddress and/or totakeaction against such
circumvention, thatpartyshould consult promptly withthepartyinvolved withaviewtoseeking
amutually satisfactory solution. Suchconsultations should beheldpromptly, beginning within
30daysofreceipt ofawritten request byaparty accompanied byanexplanation fortherequest
from theother party andconcluding within 90days, unless extended bymutual agreement.
Should theparties beunable toreach asatisfactory solution, thentheGovernments ofBrazil
andtheUnited States agree thatincases where clearevidence regarding suchfalsedeclarations
hasbeenprovided, thentheUnited States maydeduct fromtherespective quantitative limits
anamount equivalent totheamount oftheproduct subject tothefalse declaration or
classification. Anysuchaction shallbenotified totheTSBoritssuccessor withfulljustification.
Thisprovision isnotintended toprevent parties from making technical adjustments when
inadvertent errors indeclarations havebeenmade.
(G) Intheevent ofaneedarising totakerecourse toanyadjustment assetoutinparagraphs (D),
(E),and(F),theUnited States willexplore withBrazil allpossible avenues forfinding a
mutually satisfactory solution before taking suchaction, together withitstiming andscope.
Action taken under theparagraph (D),(E),and(F)maybereferred byeither party totheTSB
oritssuccessor forrecommendation.
Correct Category/Correct Quantity VisaSystem
20.(A) BothGovernments agree toestablish acorrect category/correct quantity administrative visa
arrangement.
(B) Uponestablishmentofamutuallyagreedcertificationsystem,andinaccordancewithArticle12,
paragraph 3oftheArrangement, Brazilian exports ofhandloom fabrics ofthecottage industry
orhand-made cottage industry products made ofsuchhandloom fabrics, oritems inanagreed
listoftraditional folklore handicraft textile products, willnotbesubject totheprovisions of
thisAgreement.
(C) Both Governments recognize thatunder theAgreement thepurchase oftextiles andtextile
products tobedelivered subject totherestrictions under theAgreement implies thatthedelivery
ofgoods willbeaccompanied byavalid visa.
Exchange ofInformation
22. EachGovernmentagreestosupplytotheotherGovernmentanyinformationwithinitspossession
whichitreasonablybelievestobenecessaryfortheenforcementofthisAgreement,includinginformation
pertaining tofraud andcircumvention.G/TMB/N/265
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ANNEX A
Categories numbered inthe:
200series areofcotton and/or man-made fibre
300series areofcotton
400series areofwool
600series areofman-made fibre
CATEGORY DESCRIPTION UNIT CONVERSION
FACTOR
TOSQUARE METER
YARN
200 Yarns putupforretail sale, kg. 6.60
andsewing thread
201 Specialty yarns kg. 6.50
300 Carded cotton yarn kg. 8.50
301 Combed cotton yarn kg. 8.50
400 Wool yarn kg. 3.70
600 Textured filament yarn kg. 6.50
603 Yarn containing 85%ormore
byweight artificial
staple fibre kg. 6.30
604 Yarn containing 85%ormore by
weight synthetic staple
fibre kg. 7.60
606 Non-textured filament yarn kg. 20.10
607 Other staple fibreyarn kg. 6.50
FABRIC
218 Ofyarns ofdifferent colour m2 1.00
219 Duck m2 1.00
220 Fabric ofspecial weave m2 1.00
222 Knitfabric kg. 12.30
223 Non-woven fabric kg. 14.00
224 Pile&tufted fabric m2 1.00
225 Bluedenim m2 1.00
226 Cheesecloth, batiste, lawn, voile m2 1.00
227 Oxford cloth m2 1.00
229 Special purpose fabric kg. 13.60
313 Sheeting m2 1.00
314 Poplin &broadcloth m2 1.00
315 Printcloth m2 1.00
317 Twills m2 1.00
326 Sateens m2 1.00
410 Woven fabric m2 1.00
414 Other wool fabric kg. 2.80G/TMB/N/265
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611 Woven fabric containing 85%or
more byweight artificial staple m2 1.00
613 Sheeting m2 1.00
614 Poplin &broadcloth m2 1.00
615 Printcloth m2 1.00
617 Twills &sateens m2 1.00
618 Woven artificial filament fabric m2 1.00
619 Polyester filament fabric m2 1.00
620 Other synthetic filament fabric m2 1.00
621 Impression fabric kg. 14.40
622 Glass fibrefabric m2 1.00
624 MMF fabric, woven, containing more
than15%butlessthan36%wool m2 1.00
625 Poplin &broadcloth ofstaple/
filament fibrecombinations m2 1.00
626 Printcloth ofstaple/filament
fibrecombination m2 1.00
627 Sheeting ofstaple/filament
fibrecombinations m2 1.00
628 Twills &sateens ofstaple/filament
fibrecombinations m2 1.00
629 Other fabrics ofstaple/filament
fibrecombinations m2 1.00
APPAREL
237 Playsuits, sunsuits, etc. doz 19.20
239 Babies 'garments andclothing
accessories kg. 6.30
330 Handkerchiefs doz 1.40
331 Gloves andmittens dpr 2.90
332 Hosiery dpr 3.80
333 M&B suit-type coats doz 30.30
334 Other M&B coats doz 34.50
335 W&G coats doz 34.50
336 Dresses doz 37.90
338 M&B knitshirts doz 6.00
339 W&G knitshirts &blouses doz 6.00
340 M&B shirts, notknit doz 20.10
341 W&G shirts &blouses, notknit doz 12.10
342 Skirts doz 14.90
345 Sweaters doz 30.80
347 M&B trousers, breeches &shorts doz 14.90
348 W&G trousers, breeches &shorts doz 14.90
349 Brassieres &other body supporting
garments doz 4.00
350 Robes, dressing gowns, etc. doz 42.60
351 Nightwear andpyjamas doz 43.50
352 Underwear doz 9.20
353 M&B down-filled coats doz 34.50
354 W&G down-filled coats doz 34.50
359 Other cotton apparel kg. 8.50
431 Gloves andmittens dpr 1.80G/TMB/N/265
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432 Hosiery dpr 2.30
433 M&B suit-type coats doz 30.10
434 Other M&B coats doz 45.10
435 W&G coats doz 45.10
436 Dresses doz 41.10
438 Knitshirts &blouses doz 12.50
439 Babies 'garments andclothing
accessories kg. 6.30
440 Shirts &blouses, notknit doz 20.10
442 Skirts doz 15.00
443 M&B suits no. 3.76
444 W&G suits no. 3.76
445 M&B sweaters doz 12.40
446 W&G sweaters doz 12.40
447 M&B trousers, breeches &shorts doz 15.00
448 W&G trousers, breeches &shorts doz 15.00
459 Other wool apparel kg. 3.70
630 Handkerchiefs doz 1.40
631 Gloves andmittens dpr 2.90
632 Hosiery doz 3.80
633 M&B suit-type coats doz 30.30
634 Other M&B coats doz 34.50
635 W&G coats doz 34.50
636 Dresses doz 37.90
638 M&B knitshirts doz 15.00
639 W&G knitshirts &blouses doz 12.50
640 M&B shirts, nonknit doz 20.10
641 W&G shirts &blouses, notknit doz 12.10
642 Skirts doz 14.90
643 M&B suits no. 3.76
644 W&G suits no. 3.76
645 M&B sweaters doz 30.80
646 W&G sweaters doz 30.80
647 M&B trousers, breeches &shorts doz 14.90
648 W&G trousers, breeches &shorts doz 14.90
649 Brassieres &other body supporting
garments doz 4.00
650 Robes, dressing gowns, etc. doz 42.60
651 Nightwear andpyjamas doz 43.50
652 Underwear doz 13.40
653 M&B down-filled coats doz 34.50
654 W&G down-filled coats doz 34.50
659 Other man-made fibreapparel kg. 14.40G/TMB/N/265
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MADE-UP AND MISCELLANEOUS TEXTILES
360 Pillowcases no. 0.90
361 Sheets no. 5.20
362 Bedspreads andquilts no. 5.80
363 Terry andother piletowels no. 0.40
369 Other cotton manufactures kg. 8.50
464 Blankets kg. 2.40
465 Floor coverings m2 1.00
469 Other wool manufactures kg. 3.70
665 Floor coverings m2 1.00
666 Other man-made fibrefurnishings kg. 14.40
669 Other man-made fibremanufactures kg. 14.40
670 Flatgoods, handbags, andluggage kg. 3.70