COMMISSION OF THE EUROPEAN COMMUNITIES 
Brussels, 15.05.1997 
COM(97) 219 final 
Report from the Commission to the Council on the respect of market access 
commitments by WTO Members in the textiles and clothing sectors 

1.0 Introduction 
In accordance with Article 1(7) of Council Regulation (EEC) No. 3030/93l the 
Commission presents its report on the respect by third countries of their commitments 
under the WTO rules and disciplines referred to in Article 7 of the WTO Agreement on 
Textiles and Clothing (ATC). 
Article 7 of the ATC stipulates that WTO Members shall take such necessary actions to 
abide by GATT 1994 rules and disciplines so as (a) to achieve improved market access, 
(b) to ensure the application of fair and equitable trading conditions in such areas as 
dumping, subsidies and intellectual property rights, and (c) to avoid discrimination 
against imports when taking measures for general trade policy reasons. 
According to the provisions of the article, and following authorisation by the Dispute 
Settlement Body, importing members have the possibility to cut back the increased 
growth rates provided for under Article 2.14 of the ATC should any exporting member 
breach their Article 7 commitments. 
Article 7 provides that these obligations are to be fulfilled with reference to the specific 
commitments undertaken by Members as a result of the Uruguay Round. For this reason 
the present report concentrates on instances where WTO members have clearly infringed 
GATT 1994 rules and disciplines and where these infringements have been brought to the 
attention of the Commission. 
Finally, it should be remembered that three other reports have been prepared on similar 
subjects related to that being covered by this report. The Commission services have 
recently submitted a report to the Article 113 Committee on the overall implementation of 
GATT 1994 commitments by contracting parties. In addition, the Textiles Monitoring 
Body has prepared a report on implementation of the ATC2 and the Council on Trade in 
Goods has also prepared a report on the same subject3 - however, since these reports have 
largely relied upon notifications by WTO Members this aspect of implementation was not 
fully covered. 
1 OJNoL275, 8.11.1993, p. 1. 
2 WTO document, G/L/113 of 4 October 1996 
3 WTO document, G/L/134 of 5 November 1996 
2.0 The achievement of improved market access 
2.1 Trade 
Annex I to this report provides historical details of trade with selected WTO members 
including all those whose textiles and clothing exports are subjected to Community 
quantitative restrictions for specific product categories. In global terms (including trade 
with non-WTO members) Community exports have increased steadily over recent years. 
If one looks at individual export markets this trend is, largely, repeated. In particular, 
exports to the ASEAN countries have increased significantly, in some cases doubling 
between 1993 and 1995. 
While in several cases the level of exports remain disappointingly low and while market 
access problems do remain with many third countries it can be reasonably assumed, from 
looking at the trade statistics, that market access conditions for Community exports of 
textiles and clothing products have been improving. 
2.2 Obstacles to Market Access 
In line with the principles elaborated in its recent Communication "The Global Challenge 
of International Trade: A Market Access Strategy for the European Union"4 the 
Commission has held comprehensive consultations with industry, Member State 
representatives and the Commission's own delegations in third countries in order to 
determine the extent to which WTO commitments are being honoured by our WTO 
partners. Based upon the information received the Commission has established a data­
base of market barriers existing in third countries which has been circulated to Member 
States and industry for their reference, use and comments. 
2.2.1 Tariffs 
Argentina has recently adopted specific duties which are in violation of the tariff binding 
commitments given during the Uruguay Round negotiations. After consulting Member 
States the Commission entered into consultations with Argentina under Article XXII of 
GATT 1994 and has joined, as a third party, the US request for a dispute panel. 
Of additional concern is the fact that, as regards textiles and clothing products, some 
countries, notably Brazil, Mexico, South Africa and South Korea, have increased their 
applied tariff rates while staying within their bound rates. Although not incompatible with 
these countries respective WTO commitments, such actions can be criticised for reducing 
the level of effective market access. The Commission has made representations to each 
of these countries and has requested a return to the previous tariff rates. In the specific 
case of South Korea Member States supported a Commission decision to suspend GSP 
benefits on textile and clothing products. 
4 COM (96) 53 final 
In contrast, other countries, such as India, Indonesia and Pakistan, have improved their 
tariff bindings compared to their commitments agreed at Marrakesh. This welcome 
development occurred as the result of continued encouragement from other WTO partners 
and followed exhaustive market access negotiations with major importing nations, 
including the European Community. This is of particular importance in relation to both 
India and Pakistan which were previously considered as closed markets. In addition, India 
has autonomously announced a further reduction in its applied tariff rates for selected 
textiles products. 
Other countries, most notably Thailand, have substantially reduced their applied tariff 
rates although no modifications have been made to the bound rates. It should be noted 
that the majority of third countries maintain applied tariff rates substantially below their 
WTO bound limits. 
2.2.2 Non-Tariff Measures 
As regards Argentina, the Commission is also concerned over recently introduced 
Argentine measures regarding the labelling of textiles products and the requirements for 
having certificates of origin validated by the Argentine consulate in the country of export. 
The Commission has entered into consultations with Argentina under Article XXII of 
GATT 1994 subsequent to which Argentina has made certain changes to its legislation in 
order to comply with its WTO commitments. 
In the case of South Korea the Commission was notified of certain chemical testing 
procedures on carpets which complicated import and were therefore considered as 
technical barriers to trade. After consultations with the Korean authorities agreement was 
reached that they would adopt a testing system similar to that of the Community. The 
new Korean legislation entered into effect on 15 June 1996. 
The Community also has an ongoing dispute with the US over the implementation of new 
rules of origin for textiles products. Should a satisfactory outcome to this dispute not be 
found the Commission reserves its right to propose that a formal complaint be made to 
the Textiles Monitoring Body. At the same time, industry has submitted a complaint 
under the provisions of the Trade Barriers Regulation. 
The Commission has received complaints from European industry and from certain 
Member States regarding the difficulty of obtaining import licences for textiles and 
clothing products despite assurances given in the EC/India bilateral agreement on market 
access for textiles. Under the provisions of the agreement, the Commission intends to 
hold bilateral consultations with India on this matter as soon as possible. The 
Commission has also raised the more general issue of the import licencing measures 
maintained by India under balance of payments provisions in the review which is being 
conducted by the WTO/BoP Committee. 
H-
2.3 Conclusion 
Other than the instances indicated above the Commission is not aware of instances where 
a WTO Member has not complied with its Uruguay Round commitments in relation to 
tariff reductions and bindings, non-tariff barriers or customs, administrative or licensing 
formalities, applying to textiles and clothing products. Nevertheless, should any such 
instances be brought to the Commission's attention all appropriate legal channels will be 
used in order to ensure that these obstacles to trade are removed. 
3.0 Fair and equitable trading practices 
In the areas of dumping and anti-dumping rules and procedures, subsidies and 
countervailing measures, and protection of intellectual property rights the Commission 
has not been informed by Member States, by industry or by any other sources of instances 
where WTO Members, in relation to the textiles and clothing sectors, have applied 
policies inconsistent with GATT 1994 commitments. 
This is not to say that the Commission has not encountered cases of unfair trading 
practices in the above mentioned areas and a number of procedures have been launched 
(details are provided in Annex II to this report). 
Should any such instances be brought to the Commission's attention all appropriate legal 
channels will be used in order to ensure that these obstacles to trade are removed. 
4.0 General discrimination 
The Commission has not been informed by Member States, by industry or by any other 
sources of instances where WTO Members have discriminated against imports in the 
textiles and clothing sector when taking measures for general trade policy reasons. 
Nevertheless, should any such instances be brought to the Commission's attention all 
appropriate legal channels will be used in order to ensure that these obstacles to trade are 
removed. 
5.0 Conclusion 
The Commission concludes that most WTO Members have generally abided by specific 
commitments on tariffs and non-tariff specific barriers made under the Uruguay Round. 
The Community has acted swiftly to deal with breaches of WTO commitments by 
Argentina and the US. These will be pursued in the appropriate WTO Bodies. 
Where countries have not abided by the spirit of Article 7 and have taken measures which 
effectively limit market access, notably Brazil, Mexico, South Africa and Korea, the 
Commission has also begun bilateral contacts. 
Problems relating to import licences in India will be dealt with both bilaterally under the 
EC/India market access agreement, and in the WTO/BoP Committee. 
The Commission considers that the Community should use all the various instruments of 
the WTO relating to market access systematically in order to raise these and any other 
issues that European industry and Member States consider important, so as to ensure that 
the TMB takes these matters fully into account in preparing its report to the Council for 
Trade in Goods on the first stage of the ATC. 
Annexes (2) 
fo 
European 
Commission ANNEX I Directorate General 
External Relations 
EC TEXTILES AND CLOTHING TRADE 1992-1995 WITH WTO COUNTRIES SUBJECT TO QUOTAS 
DOMINANT SUPPLIERS 
HS-CHAPTERS 50-63 
PARTNER 
SOUTH KOREA 
HONG KONG 
MACAO FLOW 
Imports 
Exports 
Balance 
Imports 
Exports 
Balance 
Imports 
Exports 
Balance TRADE VOLUME(MECU) 
1392 
1,079 
300 
-779 
2,590 
772 
-1,818 
426 
3 
-422 1993 
931 
345 
-587 
2,810 
992 
-1,819 
453 
4 
-449 1994 
852 
514 
-338 
2,623 
1,267 
-1,355 
448 
5 
-444 1995 
828 
673 
-154 
2,601 
1,284 
-1.318 
415 
6 
-408 1992 = 100 
1992 
100 
100 
100 
100 
100 
100 
100 
100 
100 1993 
86 
115 
75 
109 
128 
100 
106 1994 
79 
171 
43 
101 
164 
75 
105 
130' 151 1995 
77 
225 
20 
100 
166 
72 
97 
201 
106J 105| 97 
INDIAN SUB-CONTINENT 
HS-CHAPTERS 60-63 
PARTNER 
PAKISTAN 
INDIA 
SRI LANKA FLOW 
Imports 
Exports 
Balance 
Imports 
Exports 
Balance 
Imports 
Exports 
Balance TRADE VOLUME (MECU ) 
1992 
980 
56 
-924 
1,870 
42 
-1,828 
325 
38 
-286 1993 
1,074 
58 
-1,016 
2,203 
66 
-2.136 
400 
50 
-350 1994 
1,171 
46 
-1,124 
2,560 
87 
-2,472 
457 
64 
-394 1995 
1,231 
55 
-1,176 
2,947 
105 
-2,842 
476 
75 
-401 1992 =100 
1992 
100 
100 
100 
100 
100 
100 
100 
100 
100 1993 
110 
102 
110 
118 
158 
117 
123 
131 
122 1994 
119 
82 
122 
137 
208 
135 
141 
166 
137 1995 
126 
97 
127 
158 
249 
155 
147 
195 
140 
ASEAN 
HS-CHAPTERS 50-63 
PARTNER 
THAILAND 
INDONESIA 
MALAYSIA 
SINGAPORE 
PHILIPPINES FLOW 
Imports 
Exports 
Balance 
Imports 
Exports 
Balance 
Imports 
Exports 
Balance 
Imports 
Exports 
Balance 
Imports 
Exports 
Balance TRADE VOLUME (MECU ) 
1992 
912 
60 
-852 
1,372 
46 
-1,326 
483 
40 
-443 
227 
165 
-62 
357 
45 
-312 1993 
905 
68 
-837 
1,466 
58 
-1,409 
504 
49 
-455 
173 
210 
37 
359 
47 
-312 1994 
901 
91 
-811 
1.559 
92 
-1.466 
528 
65 
-463 
125 
279 
154 
343 
51 
-292 1995 
866 
109 
-757 
1,508 
126 
-1,382 
464 
83 
-381 
9S 
290 
191 
306 
52 
-254 1992 = 100 
1992 
100 
100 
100 
100 
100 
100 
100 
100 
100 
100 
100 
100 
100 
100 
\ 10G 1993 
99 
113 
98 
107 
124 
106 
104 
122 
103 
76 
127 
-60 
100 
103 
100 1994 
99 
151 
95 
114 
199 
111 
109 
162 
105 
55 
169 
-248 
96 
113 
94 1995 
95 
182 
89 
110 
271 
104 
96 
207 
86 
44 
176 
-308 
86 
114 
82 
T-
European 
Commission ANNEX I Directorate General 
External Relations 
LATIN AMERICA 
HS-CHAPTERS 50-63 
PARTNER 
PERU 
j BRAZIL 
| 
| 
1 ARGENTINA 
i FLOW 
Imports 
Exports 
Balance 
Imports 
Exports 
Balance 
Imports 
Exports 
Balance 1992 
122 
4 
-117 
322 
82 
-240 
115 
71 
-44 TRADE VOLUME (MECU ) 
1993 
100 
6 
-94 
279 
150 
-130 
81 
84 
3 1994 
104 
9 
-95 
270 
153 
-117 
130 
108 
-21 1995 
104 
13 
-91 
241 
209 
-32 
178 
80 
-98 1992 
100 
100 
100 
100 
100 
100 
100 
100 
100 1992 = 
1993 
82 
138 
80 
87 
183 
54 
70 
1Ï 8~ 
-7 = 100 
1994 
85 
204 
81 
84 
187 
48 
113 
153 
48 1995 
86 
299 
78 
75 
256 
13 
155 
113 
223 
CEECs 
S HS-CHAPTERS 50-63 
! PARTNER 
| POLAND 
1 
CZECH REP. 
(1992. estimated) 
SLOWAKIA 
(1992 estimated) 
HUNGARY 
ROMANIA 
BULGARIA FLOW 
Imports 
Exports 
Balance 
Imports 
Exports 
Balance 
Imports 
Exports 
Balance 
Imports 
Exports 
Balance 
Imports 
Exports 
Balance 
Imports 
Exports 
Balance TRADE VOLUME (MECU ) 
1992 
1,114 
943 
-170 
489 
320 
-169 
177 
101 
-75 
658 
554 
-104 
494 
324 
-170 
198 
136 
-62 1993 
1,394 
1,204 
-190 
565 
448 
-117 
208 
139 
-69 
700 
602 
-98 
644 
449 
-195 
213 
155 
-58 1994 
1,634 
1,446 
-188 
710 
584 
-126 
319 
180 
-138 
749 
683 
-65 
840 
575 
-265 
250 
214 
-37 1995 
1,885 
1,738 
-147 
853 
748 
-105 
402 
267 
-135 
900 
832 
-68 
1,040 
783 
-257 
317 
278 
-40 1992 = 100 
1992 
100 
100 
100 
100 
100 
100 
100 
100 
100 
100 
100 
100 
100 
100 
100 
100 
100 
100 1993 
125 
128 
112 
116 
140 
69 
118 
137 
92 
106 
109 
94 
130 
139 
115 
108 
114 
93 1994 
147 
153 
110 
145 
183 
74 
180 
178 
184 
114 
123 
63 
170 
177 
156 
126 
157 1995 
169 
184 
86 
174 
234 
62 
227 
263 
179 
137 
150 
66 
211 
242 
151 
160 
204 
591 64 
NOTES: Reporting countries 1992-1994 : EC12; 1995 : EC15 
Ceuntries with MFA or MFA-type agreements not subject to restrictions excluded 
& 
Annex II 
ANTI-DUMPING AND ANTI-SUBSIDY MEASURES IN FORCE 
AGAINST WTO MEMBERS IN THE TEXTILE SECTOR 
AS AT 1st APRIL 1997 
PRODUCT ORIGIN MEASURE PUBLICATION 
-Cotton yarn Brazil 
Turkey duties OJL 82,27.3.92, p. 1 
-Polyester fibres Turkey 
and yarns undertaking OJ L 272, 28.9.91, p.92 
(countervailing) 
-Polyester fibres Turkey 
(synthetic) duties OJL347, 16.12.88, p.10 
-Polyester textured 
filament yarn Indonesia 
Thailand duties OJ L 128, 25.5.96, p.3 
OJ L 178, 17.7.96 
-Polyester yarns Indonesia 
Turkey duties OJL88,3.4.92,p.l 
OJL141, 14.6.96. 
-Sisal twine 
(binder and baler) Brazil undertakings OJ L 251, 8.10.93 
-Synthetic textile 
fibres of polyester Turkey 
Romania duties OJL 306, 22.10.92, p. 1 
India 
South Korea duties OJL 9, 15.01.93, p.2 
<\ 
ONGOING ANTI-DUMPING PROCEEDINGS 
AGAINST WTO MEMBERS 
AS AT 1st APRIL 1997 
PRODUCT 
-Bed linen ORIGIN 
Egypt 
India 
Pakistan TYPE 
AD initiation INITIATION 
13.9.96 
-Cotton fabric (grey) Turkey 
Egypt 
India 
Indonesia 
Pakistan AD initiation 21.2.96 
-Polyester yarn 
(POY/PTY) India 
Indonesia AD initiation 
Review 11/4 29.7.94 
23.11.96 
-Polyester yarn 
(PTY) Malaysia AD initiation 19.4.95 
-Polyester yarns 
-Polyolefin sacks 
(small) Turkey 
India 
Indonesia 
Thailand review 11/4 
AD initiation 4.7.96 
13.4.95 
-Synthetic fibre ropes 
(small) India AD initiation 4.4.96 
-Synthetic fibres 
of polyester India review 11/4 4.7.96 
\o 
ISSN 0254-1475 
COM(97) 219 final 
DOCUMENTS 
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Catalogue number : CB-CO-97-210-EN-C 
ISBN 92-78-19654-1 
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