RESTRICTEDWORLD TRADE
ORGANIZATIONG/TMB/R/96
27 March 2003
(03-1754)
Textiles Monitoring Body
REPORT OF THE NINETY-SEVENTH MEETING
1. The Textiles Monitoring Body held its ninety-seventh meeting on 24 and 25 February 2003.
2. Mr. Alfons Samosir (Indonesia) was appointed member.  Mr. Samosir appointed Mr. Krisda
Ekawat (Thailand) as his alternate.
3. Present at this meeting were the following members and/or alternates: Messrs. Dalela/Lakhal;
Gough; Lee; Samosir/Ekawat; Seppey; Sorensen; Tagliani; Ms. Ünal; Mr. Yoshikawa;
Ms. Zhang/Ms. Lu.
4. The TMB adopted the report of its ninety-sixth meeting (G/TMB/R/95).
Notification under Article 2.1 of the Agreement on Textiles and Clothing (ATC)
5. The TMB reverted to its examination of a notification received pursuant to Article 2.1 from
Turkey following China's accession to the WTO1, subsequent to its examination at the previous
meeting2, in particular, of additional information received pursuant to Article 2.1 from Turkey in
response:  (i) to the TMB's request to provide any official documentation, relevant observations or
comments that would help in clarifying and better understanding the growth rates that had been
applied by Turkey on 10 December 20013, (i.e. on the day prior to the date of China's accession to the
WTO);  and (ii) to the notification by China, as contained in G/TMB/N/447/Add.4, to which the TMB
had drawn the attention of Turkey.  On the same occasion, the TMB had also decided to draw China'sattention to the additional information provid ed by Turkey (G/TMB/N/422/Adds. 4 and 5).
Furthermore, in order to be able to fully assess the situation in the light of the statements made by
both Turkey and China with respect to the growth rates applied on 10 December 2001, the TMB had
asked Turkey to provide a copy of the agreement(s) concluded between Turkey and China referred to
in the Turkish notification, as well as a copy of relevant document(s) reflecting any possible
subsequent developments that could have been agreed between the two Members in this regard.  Both
China and Turkey had also been advised that it would be particularly helpful if information could beprovided as to whether there were any official document containing an agreement between China and
Turkey on the growth rates to be applied by Turkey specifically for the year 2001.
4
6. The TMB observed that, though no new formal communication had been provided by either
China or Turkey, China had indicated that it had no objection to the explanations provided by Turkey
on the methodology that Turkey had used to calculate the growth rates which were applied by it on10 December 2001, as contained in document G/TMB/N/422/Add.5, i.e. taking as a basis the "agreed
1994 growth rates", presumably first applied in 1996, increased by 16 and subsequently by 25 per cent
in 2001.  China also accepted that the differences in  the calculation of the growth rates resulted from
                                                     
1 See G/TMB /R/86, paragraph 4;  G/TMB/R/88, paragraph 4;  G/TMB/R/90, paragraph 49;
G/TMB/R/91, paragraphs 15 to 17, G/TMB/R/93, paragraphs 12 to 14, G/TMB/R/94, paragraph 5.  See alsoG/TMB/R/88, paragraph 8.
2 See G/TMB/R/95, paragraph 5.
3 See G/TMB/R/93, paragraph 14.
4 See G/TMB/R/94, paragraph 5.G/TMB/R/96
Page 2
the fact that Turkey had "rounded the quota levels calculated […] mostly to the upper number for its
application and that the Chinese calculations had been based on those rounded quota levels.  Thus, in
most cases, applied (published) quota levels [were] higher than calculated levels and this result[ed] in
a difference between the Turkish methodology and growth rate calculated according to published
quota level".5
7. On the basis of the above, the TMB noted that the respective growth rates applied by Turkey
on the day prior to the date of China's accession to the WTO had been those notified by Turkey in
column  F of the table contained in G/TMB/N/422/Add.5 and that there was no disagreement between
the two Members on this matter.  It was understood that these growth rates had been increased by
27 per cent in order to calculate the restraint levels for the year 2002.
8. The TMB recalled, in addition, that it had already considered at previous meetings several
other aspects of the Turkish notification, while also taking into consideration the observations madeby China pursuant to Article 2.2 with respect to the Turkish notification.  In particular, the TMB had
sought clarification from Turkey on the reasons why it had considered it appropriate to notify
quantitative restrictions under Article 2.1, keeping in mind the provisions of paragraph 241 of the
Report of the Working Party on the Accession of China, as well as those of Article 2.1 of the ATC,
which latter deal with "quantitative restrictions within bilateral agreements maintained under Article 4or notified under Article 7 or 8 of the MFA in force on the day before the entry into force of the WTO
Agreement".  Turkey stated that it had "made its notification under the Article 2.1, in conjunction with
its parallel implementation with the EU.  Within the provisions of the Customs Union and the
Decision 1/95 of the Association Council, Turkey was required to apply the quantitative restrictions as
part of the common regulation of commerce of th e Turkey-EC Customs Union on imports of certain
textile products which the EC maintained pursuant to the ATC.  The quantitative restrictions that were
notified under the Article 2.1, which [were] in force on the day prior to China's accession to the WTO
have been implemented as of 1 January 1996 with the creation of Customs Union".  In response to
TMB's request for clarifications, China stated that "[o]n 1 January 1996, Turkey entered into customs
union with the European Community.  As a result, Turkey requested to establish quota restrictions onimports of textiles and clothing from China. On 17 July 1996, China and Turkey signed the bilateral
textiles agreement with reference to the framework of Agreement between the European Community
and the People’s Republic of China on Trade in Textile Products ."  Having considered these two
communications, the TMB observed that China had not taken issue from the fact that Turkey had
notified the relevant quantitative restrictions under Article 2.1.
9. Clarification had also been sought from Turkey, inter alia , on the extent to which the
restrictions maintained by Turkey on the imports from China had been affected by the ATCintegration process and whether or not a limit applied on the combined use of the flexibility
provisions.  Turkey provided information with respect to the product categories that had been
integrated at each of the three stages of integrat ion as well as information indicating that no limit
existed on the combined use of flexibility.
10. Furthermore, the TMB had also requested clarification from Turkey on the manner in which
the growth-on-growth provisions had been implem ented with respect to China, with particular
emphasis on observations made by China in this regard, that "Paragraph 241 of the Report of the
Working Party on the Accession of China reads as follows:  'For such WTO Members, the phrase 'day
prior to the date of entry into force of the WTO Agreement', contained in Article 2.1 of the ATC,
should be deemed to refer to the day prior to the date of China's accession.'  Therefore Turkey shouldtreat China as if China joined the WTO on 1 January 1995 and the trade benefits under the ATC shall
apply to China equally".  Turkey stated that it had "increased the growth rates on the remaining
restraint levels with China by 16 per cent, 25 per cent and then 27 per cent in order to calculate the
quota levels of 2002".  The TMB observed that the implementation of these provisions by Turkey was
                                                     
5 See G/TMB/N/422/Add.5.G/TMB/R/96
Page 3
in line with the methodology implied in the observations of China and exceeded the minimum
requirements described by the TMB in its examination of this issue.6
11. In taking note of the notification provided by Turkey (G/TMB/N/422 and Adds. 1 to 5), the
TMB also observed that China's observations, made pursuant to Article 2.2, had been fully addressed
by the TMB and that they had been taken into account by Turkey in the communications it hadprovided in addition to the original notification.
Notifications under Article 6.9 of the ATC
Brazil/Chinese Taipei
12. The TMB started its review, pursuant to Article 6.9, of the notification by Brazil of a restraint
measure agreed with Chinese Taipei on imports from Chinese Taipei of other woven fabrics,
containing 85 per cent or more by weight of te xtured polyester filaments, dyed, without rubber
filaments (HS/NCM Code 5407.5210)7 and of other woven fabrics, containing 85 per cent or more by
weight of non-textured polyester filament s (HS/NCM Code 5407.6100).  According to this
notification, a limit of 16,731,305 kg. was agreed for the first quota year (i.e. 27 January 2003 to
26 January 2004).  The rollback level envisaged in Article 6.8 was 16,165,512 kg.  For the second
quota year, the quota level would be increased by 8 per cent.  The measure was agreed to remain in
force until 31 December 2004.  The TMB observed, inter alia , that the specific and relevant factual
information provided by Brazil in accordance wi th Article 6.7 contained data with respect to
developments in total imports as well as several economic variables, including production, production
capacity and capacity utilization, exports and prices , for three subsequent twelve-months periods, up
to the period September 2000 to August 2001.  It was also noted that the request for consultations had
been made on 30 October 2002.  In order to be well-placed to assess whether the products in questionwere being imported in such increased quantities as to cause serious damage to the Brazilian industry
producing like and/or directly competitive products, the TMB decided to seek additional information
from Brazil and to revert to its review at its subsequent meeting.
Brazil/Korea
13. The TMB started its review, pursuant to Article 6.9, of the notification by Brazil of a restraint
measure agreed with Korea on imports from Korea of other woven fabrics, containing 85 per cent or
more by weight of textured polyester filaments, dyed, without rubber filaments (HS/NCM Code
5407.5210) and of other woven fabrics, containing 85 per cent or more by weight of non-textured
polyester filaments (HS/NCM Code 5407.6100).  According to this notification, a limit of
15,606,527 kg. was agreed for the first quota year (i.e. 27 January 2003 to 26 January 2004).  The
rollback level envisaged in Article 6.8 was 15,078,770 kg.  For the second quota year, the quota level
would be increased by 8 per cent.  The measure was agreed to remain in force until31 December 2004.  The TMB observed, inter alia , that the specific and relevant factual information
provided by Brazil in accordance with Article 6.7 contained data with respect to developments in total
imports as well as several economic variables, including production, production capacity and capacity
utilization, exports and prices, for three subseq uent twelve-months periods, up to the period
September 2000 to August 2001.  It was also noted that the request for consultations had been madeon 30 October 2002.  In order to be well-placed to assess whether the products in question were being
imported in such increased quantities as to cause serious damage to the Brazilian industry producing
like and/or directly competitive products, the TMB decided to seek additional information from Brazil
and to revert to its review at its subsequent meeting.
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6 See G/TMB/R/90, paragraph 32.
7 NCM: Mercosul Common Tariff ("Nomenclature Comun do Mercosul")