WORLD TRADE G/TMB/R/23
7February 1997
ORGANIZATION(97-0477)
Textiles Monitoring Body
REPORT OFTHE TWENTY-FOURTH MEETING
1. TheTextiles Monitoring Body helditstwenty-fourth meeting on13to15January 1997.
2. Following theappointment ofnewmembers, alternates andnon-participating observers, the
composition oftheTMB atthebeginning of1997 wasasfollows:
Members Alternates Second Alternates
Mr/CO Jean Saint/CNJacques /CICanada/CJ Mr/CO Otto Wentzel /CINorway/CJ
Miss Claudia Orozco Jaramillo /CIColombia/CJ Mr/CO Pedro Da Costa e Silva /CIBrazil/CJ Amb/CO Alexander Kravetz /CIEl Salvador/CJ
Mr/CO John Richards /CIEuropean Communities/CJ Mr/CO Martijn Quinn /CIEuropean Communities/CJ
Mr/CO Timothy Tong /CIHong Kong/CJ Mr/CO Kyun Seop Kim /CIKorea/CJ Mr/CO Syed Jamaluddin /CIBangladesh/CJ
Mr/CO Asoke Mukerji /CIIndia/CJ Dr/CO Magda Shahin /CIEgypt/CJ
Mr/CO Hidetaka Saeki /CIJapan/CJ Mr/CO Kouichi Ito /CIJapan/CJ
Mr/CO Mumtaz Malik /CIPakistan/CJ Mr/CO Hou Iun Lam /CIMacau/CJ
Mrs/CO Lourdes A/CO Berrig /CIPhilippines/CJ
Mr/CO Jean/CNDaniel Rey /CISwitzerland/CJ Mr/CO Wieslaw Zapedowski /CIPoland/CJ Mr/CO Ali Urkan /CITurkey/CJ
Mr/CO William Tagliani /CIUnited States/CJ
Non/CNparticipating observer for Asia /DK Mr/CO N/CO R/CO Meemeduma /CISri Lanka/CJ
3. Present atthis meeting were the following members and/or alternates/second
alternates: Mrs. Berrig; Messrs. Malik/Lam; Mukerji/Ms. Shahin; Miss Orozco Jaramillo/
Messrs. DaCosta eSilva/Kravetz; Rey/Zapedowski/Urkan; Richards; Saeki; SaintJacques; Tagliani;
andTong.
4. TheTMB adopted thereport ofitstwenty-third meeting (G/TMB/R/22).
Notification under Articles 2.6and2.7(b) oftheAgreement onTextiles andClothing (ATC)
5. TheTMB reverted, onthebasis ofcorrections received, toitsreview ofthenotification made
pursuant toparagraphs 6and7(b)ofArticle 2bySaintKittsandNevis and,seeking further information
andclarification decided torevert toitatalaterstage (G/TMB/N/193 andAdd.1).
Notifications under Articles 2.8(a) and2.11oftheATC
6. TheTMB started itsreview under paragraph 21ofArticle 2oftheprogrammes ofintegration
notified pursuant toparagraphs 8(a)and11ofArticle 2byseveral Members and,seeking furtherG/TMB/R/23
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information andclarification from some Members, decided torevert toitsreview atasubsequent
meeting. Inthemeantime, inpursuance ofparagraph 11ofArticle 2,theTMB iscirculating these
notifications toWTO Members.
Notification under Article 6.1oftheATC
7. TheTMB tooknoteofthenotification made pursuant toparagraph 1ofArticle 6bySaint Kitts
andNevis thatitwished toretain therighttousetheprovisions ofArticle 6(G/TMB/N/216)
Notification under Article 6.11oftheATC
8. Atitsprevious meeting, theTMB hadinvited representatives ofBrazil andKorea tothepresent
meeting, when itintended toconduct anexamination ofprovisional safeguard measures introduced
byBrazil on1June1996, pursuant toparagraph 11ofArticle 6,onimports ofproducts ofseveral
textile categories from Korea, incasetheagreement between Brazil andKorea onrestraints hadnot
materialized. Inthecasewhere anagreed solution would havebeenreached, theTMB urged these
Members tonotify it,sothatitcould bereviewed bytheBody atthatmeeting (G/TMB/R/22). The
TMB wasinformed thatanagreed solution hadbeenreached, andthatitsdetails would becommunicated
inthenearfuture totheTMB.
Notification under Article 8.6oftheATC1
9. TheTMB considered anotification, dated 22November 1996, received fromKorea requesting
theTMB toconduct, pursuant toparagraph 6ofArticle 8oftheATC, anexamination oftransitional
safeguard measures introduced byEcuador, referring totheprovisions oftheATC, onimports ofseveral
textiles andclothing products from Korea andHong Kong. Thenotification hadbeenreceived by
theTMB afterthenotice convening thetwenty-second TMB meeting (25to26November 1996) had
beenissued. TheTMB decided, therefore, toconduct theexamination atitstwenty-third meeting on
17to19December 1996, andtoinvite representatives ofEcuador andthetwoWTO Members affected
bythemeasures tothisexamination.
10. Inacommunicationof27November1996addressedtotheTMB,Ecuadorstatedthat“atemporary
safeguard measure wasadopted bytheprevious Government onthelastdayofitsadministration, that
is,on9August 1996. Thepresent Government, which tookoffice on10August 1996, could decide,
ifnecessary, toimplement theprovisions oftheAgreement inconnection withtheadoption ofmeasures
forthissector ”.Theofficial document attached tothecommunication referred totheATC which
“establishes thatanyMember Country mayapply atransitional safeguard when aproduct isbeing
importedintoitsterritoryinsuchincreasedquantitiesastocauseseriousdamage,oractualthreatthereof,
tothedomestic industry ”.Italsomade reference totheprior opinion oftheCustoms Technical
Committee “infavour oftheadoption oftransitional safeguard measures asprovided forinArticle 6
oftheATC”andtothereport ofanInter-ministerial Commission recommending “theestablishment
ofasafeguard inaccordance withparagraph 11ofArticle 6oftheATC”.
11. Inasubsequent notification, dated 10December 1996, Korea requested theTMB thatthe
examination ofitsnotification bepostponed untilFebruary 1997, reflecting theviewwhich hadbeen
expressed byEcuador thatmore timewasnecessary foranadequate examination ofthecase. Both
Ecuador andHong Kong were informed ofthisrequest.
1Thesubstance ofthismatter hasalready been issued inG/TMB/10.G/TMB/R/23
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12. TheTMBatitstwenty-thirdmeetingdiscussedthesedevelopments.Itwasconcernedthat,contrary
totherequirements ofparagraph 11ofArticle 6,itwasnotinaposition toreview thisissue despite
thefactthatthemeasures hadbeeninplace foralmost fivemonths. Ittherefore decided toinvite
representatives ofEcuador, Korea andHong Kong toitsnextmeeting (13to15January 1997), when
itintended toconsider thismatter.
13. Atthismeeting, therepresentative ofKorea stated thatthetransitional safeguard measures
introduced byEcuador violated many oftheprovisions oftheATC. IntheviewofKorea, thishad
been acknowledged byEcuador inbilateral consultations which hadtaken place between thetwo
Members, during which Ecuador hadcommitted itselftowithdraw themeasures on9February 1997.
14. Therepresentative ofHong Kong referred toastatement made byHong Kong atthemeeting
oftheCouncil forTrade inGoods on29November 1996, andtoalettersentbyHong Kong toEcuador
requesting information onthenature andscope ofthemeasures, including theWTO provisions on
thebasis ofwhich theyhadbeentaken.
15. Therepresentative ofEcuador stated thatthesemeasures, introduced on9August 1996, consisted
ofadditional tariffduties tobeapplied against imports ofcertain textile andclothing products imported
from, interalia,twoWTO Members. IntheviewofEcuador, since Article 6oftheATC provided
fortheintroduction oftransitional safeguard measures intheform ofquantitative restrictions, the
measures introduced byEcuador could nothavebeen, andhadnotbeentaken under theprovisions
oftheATC, butunder other WTO provisions. Evidence ofthatwasalsotobefound inthefactthat
anumber ofprocedural andsubstantive requirements ofArticle 6hadnotbeenmetbyEcuador, since
itconsidered thatthese measures didnotfallwithin thepurview oftheATC. Therefore, andinspite
ofthewording oftheministerial decision, which refers totheATC, theTMB should refrain from
making anystatement onthematter which could interfere withthebilateral consultations taking place
withKorea, notunder theATC, inparticular since themeasures would lapse on9February 1997.
Asaresult ofthesebilateral consultations, which started afterKorea hadraised thisissueintheCouncil
forTrade inGoods, Korea hadrequested theTMB topostpone untilFebruary 1997theconsideration
ofthismatter. Furthermore, itwastheviewofEcuador thatifthesemeasures hadbeentaken pursuant
totheATC, paragraph 5ofArticle 8indicated thatbilateral consultations under theATC should have
beenallowed totakeplace before theTMB could consider thematter.
16. Intaking noteofthese statements, andoftheinformation provided byEcuador, theTMB noted
thattheaction taken wasnotconsistent withtheprovisions ofArticle 6oftheATC, bothbecause of
theprice-based nature ofthemeasures themselves, andbecause theprocedural andsubstantive
requirements contained inArticle 6oftheATC were notmet. TheTMB observed thatArticle 6
provides,interalia,thatthoughaMembercanintroducequantitativerestrictions“theMemberproposing
totakesafeguard action shallseekconsultations withtheMember orMembers which would beaffected
bysuchaction”,andthat,in“highlyunusualandcriticalcircumstances,wheredelaywouldcausedamage
which would bedifficult torepair, action […]maybetaken provisionally onthecondition thatthe
request forconsultations andnotification totheTMB shallbeeffected within nomorethanfiveworking
daysaftertaking theaction ”.
17. TheTMB registered itsconcern that:
(a) Ecuador hadadopted thisaction on9August 1996invoking Article 6oftheATC, but
hadnotinformed theTMB ortheaffected Members ofthisaction until
27November 1996;
(b) Consultations hadnottaken place untilKorea, having noticed thatthemeasures were
being applied, raised theissue intheCouncil forTrade inGoods andtheTMB;G/TMB/R/23
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(c) Ecuador didnotinform theTMB that,initsview, themeasures didnotconstitute
measures taken pursuant toArticle 6oftheATC untilthismeeting.
18. TheTMB, while bearing inmind thestatement byEcuador thatthese measures hadnotbeen
taken under theprovisions oftheATC, noted thatsuchmeasures hadbeeninforceforsome fivemonths
andwould remain applicable until9February 1997withpossible effects ontradebetween theMembers
concerned, andexpected thatEcuador would takethenecessary stepstodisinvoke Article 6oftheATC
withrespect tothesemeasures, andcomply withthelegalandprocedural requirements under theWTO.
Preparation forthe1997 comprehensive report pursuant toArticle 8.11
19. TheTMB decided tosendtoWTO Members inFebruary 1997arequest forinformation regarding
theimplementation ofthenotification requirements under paragraph 2ofArticle 7oftheATC, as
wellasofsomeotherprovisionsoftheATCwhicheitherdonotcontainexplicitnotificationrequirements
ordonotspecifydeadlinesforsubmittingnotifications,butwithrespecttowhichinformation,ifprovided
byWTO Members, could assist theTMB indrawing-up thecomprehensive report theTMB isdue
tosubmit totheCouncil forTrade inGoods in1997ontheimplementation oftheATC during itsfirst
stage.
Observations withrespect tolatenotifications
20. With respect tonotifications addressed totheTMB aftertherespective deadlines foreseen in
theATC, theTMB reiterated thatitstaking noteoflatenotifications waswithout prejudice tothelegal
status ofsuchnotifications.