COUNCIL REGULATION (EC) No 3289/94 of 22 December 1994 amending Regulation (EEC) No 3030/93 on common rules for imports of certain textile products from third countries

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community, and in particular Article 113 thereof,

Having regard to the proposal from the Commission,

Having regard to the opinion of the European Parliament (1),

Whereas the Community has signed the Final Act of the Uruguay Round of the GATT negotiations setting up a World Trade Organization, (hereinafter referred to as the 'WTO`);

Whereas the WTO Agreement on Textiles and Clothing (hereinafter referred to as the 'ATC`) will govern trade between all Members of the WTO in textiles and clothing products until such time as they have been integrated into normal WTO rules and disciplines within the meaning of Article 2 of the ATC; whereas it is appropriate, therefore, to extend the scope of Council Regulation (EEC) No 3030/93 of 12 October 1993 on common rules for imports of certain textile products from third countries (2), so as to cover the textile products listed in the Annex to the ATC which have not been integrated into normal WTO rules and disciplines and originating in any WTO Member;

Whereas Article 2 of the ATC provides for integration of all textiles and clothing products into normal WTO rules and disciplines in three stages; whereas it is necessary, therefore, to lay down a clear Community procedure for the selection of products to be integrated and notified to the WTO at each stage;

Whereas the WTO Agreement on Textiles and Clothing also stipulates the annual growth rates which will be applied automatically to remaining Community quantitative limits on imports from WTO members for a period of 10 years following entry into force of the WTO; whereas it is therefore appropriate that the Community quantitative limits provided for in Annex V of Regulation (EEC) No 3030/93 on imports from WTO Members should be amended at each stage of the WTO Agreement on Textiles and Clothing via the procedure provided for in Article 17 of the Regulation and Article 2 (1) of the Regulation should be amended to that effect;

Whereas it is necessary to amend the safeguard provisions laid down in Regulation (EEC) No 3030/93 in order to bring them into line with the new safeguard provisions contained in the WTO Agreement on Textiles and Clothing with regard to imports from WTO Members;

Whereas the ATC contains strengthened disciplines on circumvention of quantitative limits involving third countries with which the Community has not concluded bilateral arrangements, whereas it is appropriate therefore to lay down a Community procedure for applying these new provisions,

HAS ADOPTED THIS REGULATION:

Article 1

Regulation (EEC) No 3030/93 is amended as follows:

(a) Article 1 (1) shall be replaced by the following:

'1. This Regulation applies to:

- imports of textile products listed in Annex I, originating in third countries with which the Community has concluded bilateral agreements, protocols or other arrangements as listed in Annex II,

- imports of textile products which have not been integrated into the World Trade Organization within the meaning of Article 2.6 of the World Trade Organization Agreement on Textiles and Clothing (ATC) as listed in Annex X and which originate in third countries, Members of the WTO as listed in Annex XI.`

(b) The following paragraph shall be added at the end of Article 1;

'7. The Council, acting by qualified majority on a proposal from the Commission, shall amend Annex X of this Regulation in order to integrate the remaining products listed in Annex X into the WTO in three stages as follows:

- on 1 January 1998, products which in 1990 accounted for not less than 17 % of the total volume of 1990 imports into the Community of all textiles and clothing products covered by the ATC,

- on 1 January 2002, products which in 1990 accounted for not less than 18 % of the total volume of 1990 imports into the Community of all textiles and clothing products covered by the ATC,

- on 1 January 2005 the remaining products.

Before each integration stage referred to above, the Commission shall present to the Council a report on the respect by third countries of their commitments under the GATT rules and disciplines referred to in Article 7 of the ATC.`

(c) Article 2 (1) shall be replaced by the following:

'1. Importation into the Community of the textile products listed in Annex V originating in one of the supplier countries listed in that Annex shall be subject to the annual quantitative limits laid down in that Annex.`

(d) Article 10 shall be replaced by the following:

'Article 10

Safeguard measures

1. Should imports into the Community of products falling within any given category, not subject to the quantitative limits set out in Annex V and originating in one of the countries listed in Annex IX exceed, in relation to the preceding calendar year's total imports into the Community of products in the same category, the percentages indicated in the Table appearing in Annex IX, such imports may be made subject to quantitative limits under the conditions laid down in this Article.

2. Paragraph 1 shall not apply where the percentages specified therein have been reached as a result of a fall in total imports into the Community, and not as a result of an increase in exports of products originating in the supplier country concerned.

3. Where the Commission, upon its own initiative or at the request of a Member State, considers that the conditions set out in paragraph 1 are fulfilled and that a given category of products should be made subject to a quantitative limit:

(a) it shall open consultations with the supplier country concerned in accordance with the procedure specified in Article 16 with a view to reaching an arrangement or joint conclusions on a suitable level of restriction for the category or products in question;

(b) pending a mutually satisfactory solution, the Commission shall, as a general rule, request the supplier country concerned to limit exports of the products in the category concerned to the Community, for a provisional period of three months from the date on which the request for consultations is made. Such provisional limit shall be established at 25 % of the level of imports during the previous calendar year, or 25 % of the level resulting from the application of the formula set out in paragraph 1, whichever is the higher;

(c) it may, pending the outcome of the requested consultations, apply to the imports of the category of products in question quantitative limits identical to those requested of the supplier country pursuant to point (b). These measures shall be without prejudice to the definitive arrangements to be made by the Community, taking into account the results of the consultations.

4. (a) Should imports into the Community of textile products not subject to the quantitative limits set out in Annex V and originating in Bulgaria, the Czech Republic, Hungary, Poland, Romania or the Slovak Republic take place in such increased quantities, or under such conditions, so as to cause serious damage or actual threat thereof, to the Community's production of like or directly competitive products, such imports may be made subject to quantitative limits under the conditions laid down in the Additional Protocols with these countries.

(b) The provisions of paragraph 3, shall also apply in such cases except that the provisional limit referred to in paragraph 3 (b) shall be established at 25 %, at least, of the level of imports during the 12-month period terminating two months, or where data is not available three months, preceding the month in which the request for consultations is made.

5. (a) With regard to products listed in Annex X not subject to the quantitative limits set out in Annex V and originating in countries which are members of the World Trade Organization, safeguard action may be taken where it is demonstrated that a particular product is being imported into the Community in such increased quantities as to cause serious damage, or actual threat thereof, to the domestic industry producing like and/or directly competitive products. Serious damage or actual threat thereof must demonstrably be caused by such increased quantities in total imports of that product and not by such other factors as technological changes or changes in consumer preference.

(b) In making a determination of serious damage, or actual threat thereof, as referred to in paragraph (a) the effect of those imports on the state of the particular industry shall be examined, as reflected in changes in such relevant economic variables as output, productivity, utilization of capacity, inventories, market share, exports, wages, employment, domestic prices, profits and investment.

(c) The third country or countries, member(s) of the World Trade Organization to whom serious damage, or actual threat thereof, as referred to in paragraph (a) is attributed, shall be determined on the basis of a sharp and substantial increase in imports, actual or imminent and on the level of imports as compared with imports from other sources, market share and import and domestic prices at a comparable stage of commercial transaction.

6. Where the Commission, upon its own initiative or at the request of a Member State, considers that the conditions set out in paragraph 5 are fulfilled and that the products in question should be made subject to a quantitative limit:

(a) it shall open consultations with the supplier country concerned in accordance with the procedure specified in Article 16 with a view to reaching an arrangement or joint conclusions on a suitable level of restriction for the products in question;

(b) in highly unusual and critical circumstances where delay would cause damage which would be difficult to repair, it may impose a provisional quantitative limit on the products in question on the condition that the request for consultations shall be effected within no more than five working days after taking the action. Such provisional limit shall not be lower than the actual level from the supplier country during the 12-month period terminating two months preceding the month in which the request for consultations was made.

7. (a) Measures taken pursuant to paragraphs 3, 4 and 6 shall be the subject of a Commission communication published without delay in the Official Journal of the European Communities.

(b) The Commission shall refer urgent cases to the Committee provided for in Article 17 either at its own initiative or within five working days of receipt of a request from a Member State or States setting out the reasons for the urgency and shall take a decision within five working days of the end of the Committee's deliberation.

8. The consultations with the supplier country concerned which are provided for in paragraphs 3, 4 and 6 may lead to an arrangement between that country and the Community, on the introduction and the level of quantitative limits. Such arrangements shall stipulate that the quantitative limits agreed be administered in accordance with a double-checking system.

9. Should the parties be unable to reach a satisfactory solution within 60 days following notification of the request for consultations, the Community shall have the right to introduce a definitive quantitative limit at an annual level not lower than:

(a) in the case of supplier countries listed in Annex IX, the level resulting from the application of the formula set out in paragraph 1 or 106 % of the level of imports reached during the calendar year preceding that in which imports exceeded the level resulting from the application of the formula set out in paragraph 1 and gave rise to the request for consultations, whichever is the higher;

(b) in the case of Bulgaria, the Czech Republic, Hungary, Poland, Romania or the Slovak Republic, 110 % of the imports for the 12-month period terminating two months, or where data is not available three months, preceding the month in which the request for consultations is made;

(c) in the case of supplier countries, members of the WTO, the actual level of imports from the supplier country concerned during the 12-month period terminating two months preceding the month in which the request for consultations was made.

10. The annual level of the quantitative limits established in accordance with paragraphs 3 to 6 or 9 may not be less than the level of imports into the Community in 1985 for Argentina, Brazil, Hong Kong, Pakistan, Peru, Sri Lanka and Uruguay, and in 1986 for Bangladesh, India, Indonesia, Malaysia, Macao, Philippines, Singapore, South Korea and Thailand, of products of the same category and originating in the same supplier country.

11. The quantitative limits established pursuant to this Article shall not apply to products which have already been dispatched to the Community provided that they were shipped from the supplier country in which they originate for export to the Community before the date of notification of the request for consultations.

12. Measures taken in accordance with the provisions of paragraph 5 may remain in place:

(a) for up to three years without extension; or

(b) until the product is integrated into GATT 1994, whichever comes first.

13. The measures provided for in paragraphs 3, 4, 6 and 9 and the arrangements referred to in paragraph 9 shall be adopted and implemented in accordance with the procedure laid down in Article 17.`

(e) The following paragraph shall be added at the end of Article 15:

'5. In addition, where there is evidence of the involvement of the territories of third countries which are Members of the WTO as listed in Annex XI but which are not listed in Annex V, the Commission shall request consultations with the third country or countries concerned in accordance with the procedure described in Article 16 in order to take appropriate action to address the problem. The Commission, in accordance with the procedure laid down in Article 17, may introduce quantitative limits against the third country or countries concerned or it may take any other appropriate measures.`

(f) Article 20 shall be replaced by the following:

'Article 20

This Regulation shall not constitute in any way a derogation from the provisions either of the bilateral agreements, protocols or arrangements on textile trade which the Community has concluded with the third countries listed in Annex II or of the ATC with regard to the WTO Members listed in Annex XI and which, in all cases of conflict, shall prevail.`

(g) Annex I and Annex II to this Regulation shall be added as Annex X and Annex XI.

Article 2

This Regulation shall enter into force on 1 January 1995.

This Regulation shall be binding in its entirety and directly applicable in all Member States.

Done at Brussels, 22 December 1994.

For the Council

The President

H. SEEHOFER

(1) Opinion delivered on 14 December 1994 (not yet published in the Official Journal).

(2) OJ No L 275, 8. 11. 1993, p. 1. Regulation as last amended by Commission Regulation (EC) No 195/94 (OJ No L 29, 2. 2. 1994, p. 1).

ANEXO I - BILAG I - ANHANG I - ÐÁÑÁÑÔÇÌÁ I - ANNEX I - ANNEXE I - ALLEGATO I - BIJLAGE I - ANEXO I

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ANNEX II

'ANNEX XI

List of Members of the World Trade Organization

(This list shall be completed by the Commission in due course under the procedure laid down in Article 17 of Regulation (EEC) No 3030/93).`