WORLD TRADE  
ORGANIZATION  G/C/W/516 
13 April 2005 
 
 (05-1535) 
Council for Trade in Goods Original:   English 
  
 
UNITED STATES -  REQUESTS FOR WAIVERS FOR THE  
CARIBBEAN BASIN ECONOMIC AND RECOVERY ACT (CBERA, AS AMENDED), THE  
AFRICAN GROWTH AND OPPORTUNITY ACT (AGOA), AND THE 
ANDEAN TRADE PREFERENCE ACT (ATPA, AS AMENDED) 
 
Comments and questions from China, India and Pakistan
 
 
 
Comments and questions from China  
 
1. Both AGOA and CBERA, as amended entered into force in 2000 while ATPA, as amended 
entered into force in 2002.  We would like to know  why the United States has just recently notified 
these schemes to the WTO.  2. In each of the three requests, the United States is requesting not only a waiver for Article I of 
GATT but also one for Article XIII which de als with non-discriminatory administration of 
quantitative restrictions.  Could the United States elaborate a bit more as to why it also requests a 
waiver for Article XIII and how  this Article is related? 
 3. The benefit of preferences for textile and apparel products is cond itional on use of US 
material or components.  It is shared in studi es by various authors including the World Trade Report 
published by the WTO that such rules of origin have negative impacts on the beneficiary country 
Members.  No wonder such kind of rules of origin hinders the ability of those Members in adjusting to 
the post-ATC era.  So our question is whether the United States is considering relaxing such rules so 
that preference-receiving country Members can  benefit from these schemes more genuinely. 
 4. Since the entry into force of these prefer ence schemes, how much bilateral textile and 
clothing trade has taken place between the United States and the beneficiary countries? 
 Comments and questions from India
 
  India thanks the US for seeking consultations with interested Members on their waiver 
requests in documents G/C/W/508, 509 and 510 under pa ragraph 1 of Article I and paragraphs 1 and 2 
of Article XIII of GATT 1994.  The Indian delegati on supports the objective of providing enhanced 
Market Access for developing and l east developed countries.  To furt her its understanding of the three 
initiatives by the US for granting duty free access to the beneficiary countries, our delegation would 
like some more clarification on the various schem es designed by the US, without prejudging the 
outcome of the waiver requests.  
 1. Would the US please clarify whether the three different requests for waiver are a composite whole or does the US wish to pursue the three sep arately on their own merits? Further we would also 
request the US to indicate the rationale for seeking a waiver under Article XIII of GATT which 
pertains to non-discriminatory administ ration of quantitative restrictions.  
 G/C/W/516 
Page 2  
 
 2. We note that the AGOA and CBERA legislati ons came into effect in 2000 while the ATPA 
was implemented in 2002.  However, the waiver re quests have been made only in March 2005.  Our 
delegation requests the US to inform us the reasons for this delay in seeking a waiver.  Would the US 
please comment on the impairment of benefits to non- beneficiary countries during this period?  Is the 
US considering any compensation to the non-benefi ciary Members for the impairment thus caused? 
 
3. One of the prerequisites for eligibility for dut y free treatment for apparel and textile products 
originating in the beneficiary countries under the three schemes is that the products be assembled 
from US fabric and yarn.  Is this not a constrai ning factor for the beneficiary countries as it would 
pose a greater burden of adjustment on them in the post-ATC era?   
 
4. Could the US also please clarify whether unde r the CBERA and ATPA the apparel assembled 
in beneficiary countries with fabric formed in the US from yarn imported into the US from third 
countries is eligible for duty free treatment? If not, could the reasons for the same be indicated? 
 
5. Further are the assembled apparel products in beneficiary countries from third country fabrics 
but partially processed in the US eligible for duty free treatment under the CBERA and ATPA legislations?  If not, could the reasons for the same be indicated?  6. The data on imports of textile material s by sub-Saharan African countries, which are 
beneficiaries under AGOA, reveals that a bulk of these materials is sourced from third countries.  It 
has also been indicated in analysis that this greatly  enhances the viability of their exports.  In view of 
this could the US consider droppi ng the conditionality of using US dom estic textile materials to assist 
developing countries?  7. US data on its exports of yarns and fabrics to  CBI countries as compared to its exports to the 
world shows a remarkable increase.  This points to  conclusion that the underlying objective of the 
legislation is providing export advantage to US yarn and fabric producers.  Could the US please 
comment on this observation as also the US commitment in document WT/L/104 that duty free treatment "shall be designed not to raise barriers or create undue difficulties for the trade of other 
Members"?   
8. Would the US also indicate the basis of exclusion of some sub-Saharan countries under the 
AGOA?  9. Would the US also indicate the basis on which countries and products  are graduated out of 
these schemes? 
 
Comments and questions from Pakistan
 
  Pakistan appreciates and supports the obj ective of providing improved access conditions for 
developing countries, especially the least-developed among them.  The following questions are therefore being submitted with a view to prom oting understanding of the objectives underlying the 
grant of duty-free access to the beneficiary countri es pursuant to the US legislations that are the 
subject of its waiver requests, and are without any prejudgement to the outcome of the waiver 
requests.  They are also without prejudice to the position that the Pakistan delegation may take in 
relation to the merits of the waiver requests.  Paki stan also reserves its right to pose further questions, 
should they become necessary in light of the answers by the United States. 
 
1. In documents G/C/W/508, G/C/W/509 and G/C/W/510, the United States submitted three different requests seeking waivers from its WTO obligations under paragra ph 1 of Article I and 
paragraphs 1 and 2 of Article XIII of GATT 19 94.  However, for the CTG meeting held on 
11 March 2005, the three requests were inscribed  under a single item.  Can the US please clarify  G/C/W/516 
 Page 3 
 
 
 whether it wishes to pursue these as a single request or  as three separate requests for consideration on 
their respective merits?  2. We note that paragraph 3 of the Decision on renewal of the CBI waiver granted in 1995 
(WT/L/104) provided that "the United States shall promptly notify the General Council of any ... 
modification being considered  in the list of eligible products and duty-free treatment thereof, ..." 
(italics provided) .  Will the United States please inform wh ether any such notification was made to 
the General Council;  if so, when and under what document number? 
  In this connection, can the US also comment  on the attached observations of the Textiles 
Monitoring Body in its comprehensive repor ts to the CTG on the implementation of the 
(now-defunct) ATC in its second and third stages?  3. It is noted that the CBERA and AGOA legisla tions were implemented in 2000 and the ATPA 
in 2002;  however, that the waiver requests have been made only in March 2005, i.e. four and three 
years after they were put into effect.  By subm itting the waiver requests, the US recognises that the 
measures, subject of the waiver requests, we re inconsistent with  its GATT obligations. 
  In the event, can the US please comment on the denial of benefits accruing to the 
non-beneficiary WTO Members in the meantime?  Fu rthermore, can it also inform whether it would 
consider compensating these Members for the impairment caused to those benefits? 
 
4. It is noted that one of the conditions for e ligibility to duty-free treatment of apparel products 
originating in the beneficiary countries is that the apparel be assembled with fabrics formed in the US 
with yarns formed in the US.  Can the US please clarify whether apparel assembled in beneficiary 
countries (under the CBERA and ATPA) with fabric formed in the US but using yarn imported into 
the US from third countries is likewise eligible for duty-free treatment?  If not, the reasons therefore? 
  Also, are the apparel products assembled in the beneficiary countries from third country fabrics and partially processed in the US (such as by dying and/or finishing, etc.) eligible for duty-free 
treatment under the subject legislations?  If not, the reasons for that?  
5. According to data available on US Government websites, US exports of yarns and fabrics to 
CBI countries relative to its exports to the world increased as follows:  G/C/W/516 
Page 4  
 
 United States Exports of Yarns and Fabrics 
 
  
   1989  
    2004 In $1000 
Increase 
 
Yarns : 
To world 
Of which to CBI 
CBI Share  
 
628,527 
 31,172  4.96%  
 
1,429,700 
  566,756   39.64%  
 
 127.5% 
1718.2%   
 
Fabrics:  
To world 
Of which to CBI 
CBI Share  
 2,145,899   222,039 
  10.35%  
 8,060,001 2,030,378 
  25.19% 
  
  275.6%  814.4% 
   In light of the above data, can the US pl ease comment if the underlying objective of the 
legislation is to provide export advantage to US yarn and fabric makers?  If so, how does it square 
with the commitment in paragraph 2 of the existi ng waiver decision (i.e. WT/L/104) that duty-free 
treatment "shall be designed not to raise barriers or create undue difficulties for the trade of other 
Members"?  6. The data on imports of textile materials by Sub-Saharan African count ries, beneficiaries of 
preferences under AGOA reveal that most of these ma terials are sourced from other than the US.  But 
for this flexibility, the viability of their exports is  considerably reduced.  Under the circumstances, can 
the US drop the conditionality of using US domestic textile materials to assist developing countries?  
If not, the reasons therefore.   7. Paragraph 1 of the "Understanding in Respect  of Waivers of Obligations under GATT 1994" 
provides that "A request for a waiver or for an ex tension of an existing waiver shall describe ... the 
reasons which prevent the Member from achieving its policy objectives by measures consistent with 
its obligations under GATT 1994".  Will the US kindly explain why its objectives cannot be met by GATT consistent measures?    8. It is noted that the draft decisions submitte d by the United States with the waiver requests are 
considerably different in their language than the ex isting waiver decision in respect of the CBERA (in 
G/L/104) as well as the one in respect of the ATPA (WT/L/184) that expired on 4 December 2001.  Can the US kindly explain the proposed ch anges and the reasons for those changes? 
   G/C/W/516 
 Page 5 
 
 
  
RESTRICTED  WORLD TRADE  
ORGANIZATION  G/L/683 
30 July 2004 
 (04-3284) 
  
 
Extract from 
  
COMPREHENSIVE REPORT OF THE TEXTILES MONITORING BODY 
TO THE COUNCIL FOR TRADE IN GOODS 
ON THE IMPLEMENTATION OF THE AGREEMENT ON TEXTILES AND CLOTHING 
DURING THE THIRD STAGE OF THE INTEGRATION PROCESS 
 
 "185. The second comprehensive report adopted  by the TMB contained the following: 
 "The Trade and Development Act of 2000, adopted by the US Congress and which was 
implemented as of 1 October 2000, appears to offer, as part of the Caribbean Basin Trade 
Partnership Act (CBPTA), duty-free and quota -free treatment to Caribbean countries, with 
some products eligible for benefits on an unl imited basis and others subject to an annual 
regional cap.  Another portion of the Trade and Development Act of 2000 (the African 
Growth and Opportunity Act) is related to tr eatment offered to imports from 48 Sub-Saharan 
African countries which, according to indications, provides, inter alia , that certain clothing 
items produced in beneficiary countries are elig ible to enter the US market, both duty free and 
quota free, provided that certain conditions are met.  The TMB requested detailed information 
from the United States regarding the African Gr owth and Opportunity Act and the Caribbean 
Basin Trade Partnership Act, in particular on the impact of their entering into force on the 
implementation of specific provisions of the ATC, such as the application of restrictions 
notified under Article 2.1.  The United States answered, inter alia, that it would provide full 
information to the WTO at the time it w ould seek a waiver from WTO Members for the 
operation of various aspects of the Trade and Development Act of 2000 .  According to the US 
communication, in the interim, detailed info rmation concerning the Trade and Development 
Act may be found on US Otexa's website."[Footnote omitted]
1 [Italics provided] 
 
186. In a related footnote to the same report2 it was observed that "[s]ince website information is 
not a substitute for official notifications and co mmunications to be addressed to appropriate WTO 
bodies, [...] the TMB preferred to wait for the of ficial communications of the United States as 
indicated in the US reply." 
187. Up until June 2004 the TMB has not receive d any follow-up communication or information 
from the United States.  Also, the TMB is unaware  of any related notification or communication by 
the United States addressed to any other relevant bod y of the WTO.  However, both Acts have been 
implemented for several years and it would appear that their provisions relating to textiles and clothing have been heavily relied upon.  It woul d also appear that the implementation of these 
                                                     
 
1 See G/L/459, paragraphs 269 to 271. 
2 See G/L/459, footnote 114. G/C/W/516 
Page 6  
 
 provisions have affected the application of at l east some of the restrictions notified pursuant to 
Article 2.1. 
188. It should be mentioned in this context that at its meeting of April 2003, the TMB had already 
"recalled that, inter alia , Article 3.3 states that '[d]uring the duration of this Agreement, Members 
shall provide to the TMB, for its information, no tifications submitted to any other WTO bodies with 
respect to any new restrictions or changes in ex isting restrictions on tex tile and clothing products, 
taken under any GATT 1994 provision, within 60 da ys of their coming into effect.'  The TMB 
stressed the importance of Members' adherence to th e notification requirements contained in the ATC.  
It was also observed that measures or actions, ot her than those falling un der the provisions of 
Article 3.3, having a bearing on the implementation of other provisions of the ATC should also be 
brought to the TMB's attention, for its information."
3  At its meeting of September 2003, the TMB 
reverted to this matter.  It observed that since th e report of its meeting of April 2003 had been issued, 
no related notification or info rmation from Members had been received.  The TMB assumed, 
however, that agreements had been reached be tween certain Members or policies adopted and 
developed by some Members, falling under the provis ions of Article 3.3 or having a bearing on the 
implementation of other provisions of the ATC, w ithout being notified to any WTO body or brought 
to the attention of the TMB.  The TMB, therefor e, urged the Members concerned to provide to the 
TMB, pursuant to Article 3.3, any relevant no tifications submitted to any other WTO bodies with 
respect to such agreements or policies and/or to  bring to the TMB's attention those measures or 
actions having a bearing on the implementation of othe r provisions of the ATC, in particular on that 
of Article 2.4 
189. In the context of the preparation of the pr esent report, the TMB submitted to the United States 
that it had observed, inter alia , that the United States had adopted and begun to implement the Andean 
Trade Promotion and Drug Eradication Act (ATPD EA), containing also provisions relating, inter alia , 
to trade in textiles and clothing products and, thereby, in all likelihood having also an impact on the implementation of certain restricti ons notified under Article 2.1.  Si milarly, the TMB was aware that 
certain provisions of AGOA related to trade in the se ctor, such as the one enabling the beneficiaries to 
use materials other than those made in the United St ates or in the African region, will expire by the 
end of September 2004 and that steps have been unde rtaken with a view to extending and, perhaps 
also amending them. The TMB had so far received no official notification or communication regarding the implementation by the United States of the Caribbean Basin Trade Partnership Act 
(CBPTA), which provides duty-free and quota-free treat ment to Caribbean countries, as already noted 
by the TMB in its second comprehensive report.   Su ch implementation affects also the application of 
at least some of the restrictions notified under Article 2.1.  The TMB, therefore, asked the 
United States to provide information in this regard .  The US stated in reply that "the United States 
intends to notify these programmes to the Council for Trade in Goods [...] as soon as possible." 
190. Noting that the United States intends to no tify these programmes to the CTG as soon as 
possible, the TMB also observes that, at the date of adoption of the present report, the Body still has 
no official information at its disposal on the basi s of which it could offer substantive comments with 
respect to the impact of the programmes in quest ion on the implementation of the provisions of 
Article 2.  The continued lack of official notificati on and information in this regard raises concern, at 
least as far as the ability of the TMB to comply with  its mandate as defined in the ATC is concerned. 
(iv) Suspension of the application of restri ctions to imports from certain Members 
__________ 
                                                     
 
3 See G/TMB/R/98, paragraph 29. 
4 See G/TMB/R/102, paragraph 8.