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COM(81)556
Vol.1981/9013

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COM(81)556 final
Bruxelles,le30thSeptember1981
COMMISSION
DES
COMMUNAUTES EUROPEENNES
Secrétariatgénéral
TEXTILEAGREEMENTS
ss
COMMUNICATION ANDRECOMMENDATION FROMTHECOMMISSION
TOTHECOUNCILCONCERNINGRENEWAL^THEBILATERAL
COM(81)556final

TABLEOFCONTENTS
INTRODUCTION
I.Objectives
45&V1.Maintenanceoftheconceptofthecumulativeeffectofmarketdisruption%>.At*,.Systemofglobalceilings
3.Frameworkforimports
4.Differentiation accordingtoproductsensitivity andsuppliercountry
5.Opening^gj^marketstoCommunityexports%
11.Generalstructuryof theimportarrangements
1.Listofproductscovered,theircategorisation andclassification
2.Statistical information
3.Applicationoftheorigin
4.Countrieswithwh'ichabilateralagreementmustbeconsidered
5.FixingandgrowthofglobalceilingsinrespectofMFAandpreferential countries
6.Checkingandadministering importseffefcSj&dundertheproposedarrangements
(a)Communityrules
(b)TransfersbetweentheMemberStates'shanfe,
7.Arrangements foroutwardprocessingtraffic
III.Contentofthebilateralagreements
1.Quantitative limitsandgrowthrates
2.Flexibility arrangements
3.Basketextractormechanism
4.Double-checking andexchangeofstatisticalinformation 'xk T•h'VUW WWMWWRIIIMCilIVIWAVIIUIIHW VItfWUV IVUVIIIIVIIIIHbIVII #yA%>
5.Spécialarrangements •f?
(a)Outward ,andinwardprocessingtraffic
<b)Fraud
(c)Handmadeandfolkloreproducts
(d)Priceclause
(e)Smallnon-commercial consignments andsamples
(f)Recession/reviewclause

6.Special provisions forfirst-time countries and small supplier countries
7.General provisions
(a)Duration ofthe agreements
(b)Territorial application ofthe agreements
• Conclusion
\%%
%%
%ó%
%
%
Φ
%%

INTRODUCTION
Atitsmeetingof13Julythisyear,theCounciltookthefollowingdecision:
"ActingonaproposalfromtheCommission,theCouncilwillspecifyingood
time,beforeundertaking anybilateralnegotiations andifpossiblebefore
theendofOctober,thedetailedobjectivesofcommercialpolicy,having
regardinparticulartotheaboveeconomicobjectivesandafterevaluating
v^tieresultsofthecommercialpolicydecisionstakenin1977.
TheCouncilwillalsoreviewthedegreeofsensitivity ofimportedproducts,
thecriteriatobeappliedforthispurposeandalsotheclassification of
MFAproducts.
TheCommun$Vwillstrivetoensurethattheseobjectivesareattained,
particularly'^,thecourseofthenegotiationsforbilateralMFAagreements,
inaccordance anappropriatetimetableandwithdirectivestobeadopted
induecourseby^heCouncil".
ThisCommissionCommunication isaresponsetothevariousaspectsofthis
decision.TheCommunitya^j^adyemphasizedtotheGATTTextilesCommittee
inJulytheinterdependence^^eenthemultilateralandbilateralaspectsof
thenegotiationsfortherenewat^ftheMFA.Atthisstageitisvitalfor
theCounciltodeterminetheobjectivesofthenegotiatingdirectivesforthe
bilateralagreementsinordertoEnabletheCommunitytoundertake' *-•
inparallelthenegotiationsontheMFAapj^renegotiation ofthebilateral-
agreementsandtoreachadecisiononrenewltf^ftheMFAinthelightofprogress
madeinthebilateralnegotiations .
Thispaperdealsinturnwiththecommercialpolicyobjectives,thegeneral
structureoftheimportarrangements andtheproposedcontentofthebilateral
agreements.Thepointsmadetoalargeextenttakeaccounr<5^thediscissionsthathavealreadytakenplacewithintheCouncilontheCommis^fonCommunication
onrenewaloftheMFA. Y/
ThisCommunication shouldbeseeninthecontextofthetextilepolicyofthe
Communityasawhole.InthisconnectiontheCommissiondrawsattentiontoits
1proposalsconcerningrenewaloftheMFA,theoutwardprocessingarrangement
inthetextilesectorandthenewapproachonimportsoftextileproductsfrom
3 ..._.4theMediterranean countries.TheCommissionalsoreferstoitsReportonthe
resultsofthe1977commercialpolicydecisions,whichdealswithvariousmore
technicalaspectsonwhichthisCommunicationisbased,andtoitsCommunication ^
onthesituationofthetextileandclothingindustryintheCommunityandits
futureprospects.Lastly,theCommissionstressesthetariffcontextoftextile
tradeandtheneedforadecisioninthismatterfollowingtheCommunity's

StatementattheendoftheTokyoround(seeAnnexI).
%\%
%
1%,
C0MC81)129f%l
C0M(81)61final.
C0MC81)555final.
53 ^C0MC81)53final.c4
C0MC81)388final.^
%\

Objectives
Atitsmeetingof13July1981theCouncilindicateditsagreementto
certainfundamental Communityobjectivesforthenegotiations onMFA
renewal.Itwasdecidedthattheseobjectiveswouldbespeltoutin
detailbytheCouncillaterandthat,inthelightofthisexamination,the
Communitywoulddetermineitspositionregardingthescopeforamendingthe.
developmentrates,baselevelsandflexibilityrules.
TheCommissionistakingtheopportunityprovidedbythepresentation ofits
recommendation concerningthedirectivesforthenegotiation ofthebilateral
textiIj^agreementstoformulateingreaterdetailcertaincommercialpolicy
objectiv^J^already approvedbytheCouncilinorderthatthelattermaytake
adecision^^hem.
Withregardtothethreepossibilities referredtoabovetheCommission
proposessolutionsin^epingwiththeaimssoughtafterandconsistentwiththeMFA(onthissubjec^teeforinstanceSectionsIII.1,III5(a)and
<ΐ)).%
Maintenance oftheconceptofthecumulativeeffectofmarketdisruption
Theproblemof"cumulativemarketd^^ption"continuestoarisewithcertain
verysensitiveproductswheretheCommd^J^marketischaracterizedby
aparticularlyhighpenetrationrateinr«^gctoftotalimportsfrom
certainmajorlow-costsuppliercountriesandfromsmallerlow-cost
exportingcountries.Toresolvethisproblem,theobjectiveistoseek
overasufficientlylongperiod,aswasdoneunderM^II,arateof
developmentoftotalimportsoftheseverysensitivepJ^^uctsfromlow-
costcountrieswhichiscompatiblewiththestateofthe^pjpunitymarket
andisnotliabletoupsetit.Ingeneral,thisobjective/l^aldnot
callintoquestiontheaccesslevelslaiddownundertheagreements
inforce.
2.Systemofglobalceilings
Asregardstheverysensitiveproductsanoverallassessmenthasbeen
madeofimportpossibilities inthelightoftheCommunity'seconomic
needsandinternational obligations.

Onthisbasis,internalglobalceilingsarefixedforMFAandpreferential
1countriesandforOPToperations.Theinternalglobalceilingsare
subjecttoannualgrowthrateswhichtakeaccountofconsumptiontrends
ontheCommunitymarket.
3.Frameworkforimports
Importsofproductscoveredbythetextilepolicyfromlow-costcountries
aresubjecttoasystemprovidingaframeworkgraduatedaccordingto
productsensitivity andpermittingstatisticalmonitoring.Ingeneral,
theyfecategoriesofproductswhicharealreadythesubjectofrestrictions
inthwaxisting agreementsshouldalsobesoinfuturebilateralagreements.%
Forthewwrcategoriesofproducts,limitscanbenegotiatedaccording
toproductsensitivity andtheamountofimportsin1980comparedwithextra-
EECimportsthatyear.Allcategoriesofproductsnotsubjecttoprior
limitswouldbeco^edbythe"basketextractor"system.
4.Differentiation accordi1%>£oproductsensitivityandsuppliercountry
(a)Theproductscoveredwiltcontinuetobetreateddifferentlyaccording
totheirsensitivity.Theclassification oftheproductsistobe
revisedbyreferencetothepre^^situationasdescribedinthe
Commissionreportontheresultsop&becommercialpolicydecisions
adoptedin1977.Itisproposedtom^jjjteainthedeviceofdifferent
productgroupsclassifiedaccordingtot^esensitivityoftheproducts
inquestion.Theannualgrowthratesfortheimportlevelsbyproduct
andthevariousflexibilityprovisionscanbevar^daccordingtothe
grouptowhichtheproductinquestionbelongs.Tf^Sj^forGroupI
products,thegrowthrateforimportswillinevitably^^lower thanfor
otherproductgroups. ^
AsregardstheACPcountries,specialprovisionsaresetoutintheCommissro^sMarchCommunication concerningpreferentialcountries(COP(81)53final).

(b)Thetreatmentofimportswillalsobedifferentiated accordingto
suppliercountry.Forthedominant,mostdevelopedcountries,the
annualincreaseinthequotasshouldbeminimalinthecaseofthe
mostsensitiveproducts.Thescopeforflexibility shouldbereduced
bysuchanextentastakesaccountofthesecountries'dominant
position.Conversely,thegrowthandflexibilityratesapplicable
toothersuppliercountries *quotasmaybehigher.Thevariouscriteria
fordifferentiation aresetoutinAnnexIII.
(c)Oneoftheothermeanswhichshouldallowthepracticalimplementation
ofadifferentiated approachtosuppliercountriesisoutwardprocessing
tr^&Mc(OPT).Outwardprocessingmustinparticularpermitare-
orienfwionofourtradewiththesuppliercountries:
-inthecaseofthedominant,mostdevelopedsupplierssoasto
replacesomeoftheexistingtradeflowsbyOPTinordertomaketheAtradeeasierfor<2wpmunityindustrytocopewith.
-inthecaseofothersofipliers,soastoincreasetheirtotal
exportopportunities inreturnforanincreaseinOPT'sshareof
thattotal.
5.OpeningupmarketstoCommunityexpoi^fe.
TheCouncilhascalledforanefforttoop^?upmarketswhichcurrently
failtoofferfairoutletsfortheCommunity'stextileandclothing
exports.%
TheCommunityhasalreadymadeclearinGenevaintheeffigj^Textiles
Committeehowmuchimportanceitattachestoacontributic^^newly
industrialized andstate-trading countriestotheexpansionoftextile
tradebyopeninguptheirmarkets.Inthebilateralnegotiations
withthesecountries,theCommunitycouldmakechangesintheconditions$0ofaccesstoitsmarketdependentuponmeasurestakenbytheseexportifl^fe
countriestoimporveaccesstotheirownmarketsfortheCommunity's^
textilesandclothingproducts.

-4-
II.General structure ofthe import arrangements
The Commission considers that thebasic aspects ofthe import arrangements
established in1977 toimplement the Community 'stextile policy should
bemaintained forthe ,duration ofthe newbilateral agreements .Onthe
A whole ,themeasures taken have proved their worth .Changes should ,however ,
bemade totake account ofthe developments inthe situation inthe%Community 'stextile sector ingeneral .Remedies should also befound so
astoavert orcope with particular difficulties (fraud ).Lastly ,new
provisions should beintroduced for OPTinaccordance with the Commission'.s
proposal onthis subject .%
II.1.Listay^roducts covered ,their categorization andclassification
Article 12ofthe MFAspecifies thetextile products covered bythe
Arrangement .Th^Community hasalways indicated inthenegotiations .
with thetextile step Iiercountries thatitintended theagreements
tocover alltexti le^ftoducts falling within CCT Chapters 50to62
covered bythe MFA.Inzfecaseofstate-trading countries ,special
arrangements have been made covering linen products too.The Commission
proposes that theproduct coverage provisions intheexisting bilateral
agreements bemaintained . . -
%/■
Itnevertheless considers thatitwoulc$J^useful tomakeprovisionforthemerging ofcertain categories relating tolikeproducts ^and
1theintroduction ofsome new subcategories .
%%\
1„ •. */>See Annex IV.%%

The Commission would also Like tostress that,inorder toensure
uniformity andobjectivity vis-d-visexporting countries with regard
totheclassification oftextile products inthedifferent categories ,
such classification must beeffected inrespect ofexports from third
countries solely onthebasis oftheprovisions inforce inthe
Community concerning the CCT and Nimexe .
The process ofchecking thenature oftheproducts should besuch as
t^jjpable theclassification tobecorrect andrapidinorderto
ensu^^jith otherinstruments thatthecategorization system is
effect!^ Consequently ,amendments tothe CCTandNimexe and
classification decisions atCommunity level required forthat purpose
should beadopted swiftly .
Inorder tominimize$fclplays tothetrade itisproposed that the new
bilateral agreements ^j^ilate thatdiscrepancies intheclassification
applicable toproducts bedealt with byprovisionally applying the
classification considered appropriate bythe competent customs
authority atthepoint ofentry ioto the Community oftheproducts in
question . tyt.\
Asregards thepossibility ofcreating s^ferate categories forchildren'
clothing ,the Commission ispursuing itsdiscussions with thetrade and
industry .
V\
%%

Theclassification ofproductsindifferentgroupsaccordingtotheir
sensitivitywillalsohavetobemodifiedtotakeaccountofchanges
inthesituationinthetextilesectorsince1977.Anumberofideas
havealreadybeenputforwardonthissubjectintheCommission's
reportontheresultsofthecommercialpolicydecisionstakenin1977.
Onthebasisofthatanalysis,andinthelightofthesituationinthe
industry,theCommissionproposesthatcategories12(socks),21(anoraks),
and73(tracksuits),inrespectofwhichtheratesofpenetration
ontotheCommunitymarkethaveincreasedconsiderably since1977,
shpuldbeaddedtoGroupI.Ontheotherhand,categories 3(synthetic
fabrics)and5(pullovers),wherethepenetrationlevelshavediminisheds'ffee1977,shouldbewithdrawnfromthepresentGroupI."'
%
TheComm^iSsionisalsoproposinganumberofchangesinGroupII.
Forthesakeofsimplification ,itconsidersthatalltheother
categoriesshouldbelumpedtogetherinGroupIII(withtheexception
ofthecategorie^^linen andramieproducts,whichwillcontinue
toformaseparate^rawp).Withinthethreegroupssoconstituted
itisproposedthattetfl^fleproductsbeseparatedfromclothing
products.ThedetailsofthesechangesaresetoutinAnnexIII.
2.Statisticalinformation 'J&W .\
Inordertomonitorthedevelopmentof^j^?ortsintotheCommunityofthetextileproductscoveredbythevario^categories,theCommunity's
systemofstatisticalsurveillance mustcontinuetobeappliedinrespect
ofallsupplyingcountries.Thissystemwillbeidenticalinits
structuretothatatpresentinoperation.<$>>\
TheCommissiondrawsattentiontotheneedtocomplywitli^hetime-limits
laiddownforcommunicating statistics (Article12ofRegulation3059/
78;Article38ofRegulation 1736/75).
TheCommissionalsoconsidersthatitisessentialforMemberstates%^
tobeabletocommunicateregularlytotheCommissionproduction -1^
statisticsfortextileproducts.Proposalstothiseffectwillbe
submittedlater.
1
Asregardspreferentialcountries,astatuquohasbeenproposedfor
for1982;thepossibilityofchangingGroupIfrom1983willbe
examined.

-7-
II.3.Application oftheorigin rules
Thepresent bilateral agreements are based ontheprinciple that they
apply toanytextile orclothing product originating inthesupplier
fy. country concerned whether that product beexported directly orindirectly
tothe Community .This principle must bemaintained .%
Theprinciple ofadefinition oforigin common toall the agreements ,which
isanessential instrument fordistinguishing between supplier countries ,
must bemaintained onthe basis ofexisting Community provisions .
II.4.Count^^withwhich abilateral agreement mustbeconsidered
The Commission --considers that .in.principle -the .Community should negotiate the
renewal ofallit§existing agreements (Annex V). The Commission
0jhwould ,however , outthat some ofthese agreements(e.g .with
Bangladesh ,Guatemalc$£^d Haiti)donotcontain anyquotas .The
countries concerned are^ot only among theCommunity 'ssmallest
suppliers ,butalsoitspoorest .Such agreements maybeuseful
intheadministrative context ofmonitoring import flows .The
Commission doesnot,however ,co^^er renewal ofthoseagreements
essential ifthepartners concerned^j^notwishtorenew them.
It,therefore recommends thattheCoun<5^j^leave thepossibility of
non-renewal open should thepartner countries concerned notwant
theagreements inquestion toberenewed ,itbeing understood that
thiswould notmeanthatthepartner countries cog^erned would no
longer becovered bytheCommunity 'sgeneralised s^fem ofpreferences
inrespect ofMFAtextile products .%
\%

-8-
5.Levels andgrowth rates for1983 global ceilings inrespect of
MFA andpreferential countries .
Theglobal ceilings foreseen from 1983 appear inAnnex 2.These
ceilings areset insuch awayastomeet economic needs while
remaining compatible with theCommunity 'sobligations .Separate
global ceilings aresetforimports from mediterranean countries .
Thesumofthese twoglobal ceilings represent thsoverall objective whose
achievement canonly beassured iftheCouncil adopts the
Commission 'sproposal concerning textile policy inrespect of
preferential countries .
Wj^in theglobal ceilings forMFAcountries (setbyproduct category )
the^^mission willhavetohaveamargin ofmanoeuvre totake
accoun^^negociating requirements andinparticular thecaseof
newsuppliers .This margin will depend upon :
under OPT ) <
-thequantities covered byunder utilised quotas where such
quotas were eliminated orreduced with theagreement ofthe
partner country concerned.^fek%
Theglobal ceilings aresupplemented by<i^eserve fornegociating
purposes .Inorder torespect itsquantitative objectives and'to
make thenecessary changes inthesupplier countries' export possib­
ilities theCommunity will have atitsdisposal the/means' described
inparagraph III 1. ty**.
%
Theannual growth which will apply totheglobal ceilings ifyfrom 1983 and
during the life ofMFA IIIwill take account oftheestimated growth in
consumption andoftheaimofensuring that thetrand ofimports of
very sensitive products from lowcost countries iscompatible with
Thegrowth element will beallocated among theMember States in
accordance with thepresent burden-sharing formula butmaybe
adjusted onanadhocbasis inorder totake account ofspecific
situations ,such astheneed torestore thebalance between theimport
situations ofthedifferent Member States .
Theproposed figures fortheglobal ceilings arecontained inAnnex II.-thequantises released inthe .quotas ofdominant suppliers
through the^^nsformation ofsome -parts ofnormal quotas into
OPTquotas (de^teion being mad£ :ofthequantities nowimported .
ιιη/Ίαή ΛΡΤ ι
market situation intheCommunity and isnot liable toupsetwth
that sitdaèrpn .

-9-
II.6.Checkingandadministering importseffectedundertheproposed
arrangements (Regulation 3059):
(a)Communityrules
ThebilateralagreementsconcludedunderMFAIIareadministered under
CouncilRegulation (EEC)No3059/78of21December1978oncommonrules
forimportsofcertaintextileproductsoriginating inthirdcountries.
TheCommissionproposesthatthebasicprovisionsofthisregulationbe
maintained,subjecttocertainmodifications totakeaccountinparticular
oftheproblemarisingwithtransfersbetweenMemberStates'shares
w^J^jntheCommunitylimits.
(b)TrailersbetweentheMemberStates'shares
Themajorproblemwhichhasarisensince1977concernsthirdcountries'
requestsfortransfersbetweenthequotasallottedtothedifferentregions
oftheCommunity^^ /hilecertainproceduralproblemshavebeensolvedthe
substantiveproblem'^^asacuteasever.Thesuppliercountriescontinue
tocriticizestrongly^jj^attitudeoftheCommunity,whichcannotaccept
greaterflexibility intheadministration ofthelimitsagreedat
Communitylevel.TheCommissionconsiders,asitstatedinits
communicationonrenewaloftheMJ^(C0M(81)129final-AnnexVII),that
somedegreeofautomaticflexibili$^iithregardtotransersbetweenthe.
nationalsharesmustbecontemplatedi^Jfdertofacilitatethe
negotiationsandpavethewayforprogresS^*owards integrationofthe
Communitymarket.
Thefollowingformulaisproposed:
%
Attherequestofapartnercountry,tobepresentedaft§5^juneofeach
year/transfersofupto10%oftheamountofthesharetowfochthe
transferisrequestedmaybemadebetweennationalshareswithina
Communityquota.Thisprocedureisautomaticonlyiftheexportcertificates
•issuedbythesuppliercountryshowthatthequotafortheCommunity
beenlessthat(80%)'usedbythatcountryatthetimewhenitpresents
itsrequests.Thisformuladoesnotexcludethepossibilityofother
transfersbeingacceptedonacase-by-casebasisbytheCommunity.

-lo­
ll.7.Arrangements foroutwardprocessingtraffic(OPT)
Oneoftheobjectivesofthebilateralagreementswillbetobasetextile
tradeasfaraspossibleonspecialcooperation linksbetweenCommunity
industriesandthoseinthesuppliercountries.OPTisoneaspectof
thisindustrialcooperation andshouldenabletheCommunityindustryto
WÏobtainasubstantial advantagefromitstradewiththesecountries.
<3^ThebilateralagreementsmustthereforebeaimedatencouragingOPT^operationswhileatthesametimechannellingthequantitiesinvolved.
Tothatend,thearrangements applicabletoOPToperationswillbe
^^ematicallydistinguishedfromthoseapplicabletoordinaryimports.
In<^£prtoachievethis,itisvitalthatthedraftOPTrulescurrently
being^fijpninedbytheCouncilbodiesbeadoptedassoonaspossible.
Aseparateglobalceilingwillbelaiddowninrespectofoutward
processingoperal!^isforeachproductofwhichimportsaresubjecttoa
globalceiling.
ThisOPTglobalceiling:
-willbesettakingaccountof:
1°existingOPTquotas(statja.trading countries),
2°previousOPTtradeinrespe<^ofcountrieswithwhichOPTis
notatpresentaccountedforsrajj^ratelyinthequotas,
items1°and2°willforthwithbed^pctedfronrthereferencebases
forglobalceilingsfornormalimports.
3°areserveforallothersupplierswhichwillnotbemorethan10%
ofallthenormalquotasforagivenprodunKforthosesuppliers.
%>Inaddition,itwillbenecessaryinduecoursetotakea&fepuntofthe
quantitiesofOPTimportswhicharenegociatedwithdominantsupplier
countriesinplaceofpartoftheirquotasfornormalimports,withan
appropriatereductionintheglobalceilingsfornormalimports.Α
-beallocatedamongtheMemberStatesinthelightofwhatthe5^^%industryineachMemberStateneedsandcancopewith,thesefact^i^
beingadjustedinsomecasesbyreferencetootherfactors
(establishedtradingrights),withoutexcludingthepossibility
ofhavingtoadjustthatallocationinthefuturetotakeaccount
ofnewrequirements fchichmayariseincertainMemberStates;
-beincreasedonthebasisofagrowthratewhichisgenerally
morefavourablethanthatoftheglobalceilingearmarkedfor
ordinaryimports,accountbeingtakenofthetrendofCommunity

-11-
III.Content ofthebilateral agreements
1.Quantitative limits
-Forproducts already subject tolimits in1982 under theexisting
bilateral agreements the Commission proposed that renewal ofthe
limits benegotiated bycountry and category onthebasis ofthe
t limits agreed for 1982 .Thepresent growth percentages will have to
beadjusted totake account ofthevarious supplier countries *
development levels andtheir respective shares ofthe Community market .
V
Afij^ition ofexisting quotas maybeconsidered where those quotas are
groww .underuti lized .
Ifitproves necessary areduction ofthe access levels opened in1982
maybeconsideq^l ,provided that compensation canbeproposed inother
categories inon^^to secure theagreement ofthepartner countries
concerned .
m
The access levels ofsupplier countries which occupy adominant
position ontheCommunity marke^(either ingeneral orforcertain
products )maynotbemaintained t^f^sss partoftheexisting ordinary
quotas isconverted into OPTquotas'^J ^%
-Asforthe Community and regional limits introduced under existing
agreements through the basket extractor procedure the Commission proposes
that asageneral rule renewal ofthese limits ioffcthe new agreements
should besought .Itwould,however ,bedesirable T^examine the
regional limits casebycaseinordertodecide whethef^o abandon
themorconsider converting themintoCommunity limits,particularly
where for agiven category andsupplier country four ormore regions
ofthe Community are covered bylimits .
-Forcategories which arenotsubject tolimits intheexisting agreemetfj^
the Commission proposes that new Community limits may benegotiated if
need bewhere for agiven category imports originating inanexporting
country exceed forGroup I1%,forGroup II4%andforGroup III 6%
ofextra-EEC imports .

-12-
III.2.Flexibility arrangements
(a)Carr^_over4_carrorward_and_transfers_between_categories
UnderalltheexistingagreementsbasedontheMFAthesupplier
countriesmayincreasetheactualquotaamountinanycurrent
*- yearby5%bymeansofcarryoverfromtheprecedingyear'squota
<3^andby5%bymeansofcarryforwardfromthefollowingyear's^quota..Inordertousethis-facility,theonlyrequirementis
notification .Mostoftheagreementsalsopermit5%transfers
betweencategoriesbutlimittransferswithinGroupIandprohibit
^^fransferstothatgroupfromothergroups.Theagreementswith
countrieslimitcumulationofthesevariouspossibilities to
a"^fcre15%belowtheirmathematicalsum.
AsindicatedinSectionIII.5(f)belowtheCommissionfeelsthat,
inordertor^ji^cethelikelihoodofsuddeninflowofgoods,it
isnecessaryto^j^pulatethat,inthecaseofcertaindominant
suppliercountries^ihighlysensitiveproductsandwhere
cumulationoftheflexibilitypossibilities isalreadyrestricted;
thefollowingreductionsintheamountspermittedatpresentmustbe
soughtbytheCommunity:A%%
-forGroupIproducts,cumulationTJPj^ptedto10%(insteadof11%atpresent); ^9
-forproductsintheothergroups,11%cumulation (insteadof
12.5%atpresent).
ItalsoproposesthatthepresentlimitsfortransT^^between
categorieswithinGroupIandtothatgroupbemainta^^fJ.

0
III.3.Basketextractormechanism (AnnexVI)
-Theusefulnessofthebasketextractorsystemhasbeendemonstrated
bythewayinwhichitoperatesunderthepresentbilateral
agreements .Certaincriticisms may,however,belevelledatthis
C/i systemandtheCouncildirectivesof13Julyprovideforthe%fa*.possibilityofimprovingthesystem(point13ofthenegotiating
directives).
-Thissystemhasbeencriticizedfromthreeangles:
^a^ommunityindustryandunionrepresentativeshavecomplainedthat
the^^:etextractormechanismisunwieldy,leadingtobelatedintervention,longafterthebasketextractorthresholdhasbeen
exceeded.Itisclaimedthattherestraintachievedhaslittlein
commonwiththeinitialbasketextractorthreshold.V
Theexportingcountr>#3 >claimthatthebasketextractorthresholds
areunrealistical lylow*
Theyalsoconsiderthattherequestforexportstobesuspendedwhen
therequestforconsultationsis^fcceiveddisruptstrade.
-Higherbasketextractorthresholdsand^jpechanismpermittinglevels
ofrestraintclosertothenewbasketextractorthresholds could
provideananswertothefirsttwocriticisms.Inresponsetothe
thirdcriticism,asolutionenablingtheexporting^countriestocontinue
theirexportstosomeextentafterreceiptofarecf^^tfor
consultation shouldbesought.
%
-Theproposedamendmentstothearrangements forthebasketextractor
mechanism (seeAnnexVI)areintendedtomeetthesecriticisms while
guaranteeingacloserrelationshipwithpasttrade,thusfacilitati^^
acceptanceofthesystemundertheMFA. fy.%

- H-
III.4.Double-checking and exchange ofstatistical information
Theimportation ofanyquota-bound textile product issubject toan
1import licence being issued upon production ofanexport licence .
This .double-checking system operates satisfactorily and must beretained ,
Certain improvements should ,,however ,bemade,particularly with
regard tolicences andcertificates (see Annex VII).
Inorder toprevent fraud and reveal anydeflection oftrade ,
theexporting countries arealso required tosupply statistics
pe/aodically onexports todestinations other than che Community .
TheTglervals anddeadlines fortransmitting statistics arenot
adherec^jj^by certain exporting countries orbytheCommunity .The
relevant provisions must berealistically reviewed ,including those
pertaining tostatistical data onhandilpom andfolklore products .
Inthecaseofthew^»rt procedures ,itshould beensured ,interalia,thatthedeadlin^Xfor granting theimport documents are
respected andthat the nature ofthe imported products iseffectively
verified inorder toavoid errors orpossible cases offraud involving
their classification bycategory .
Asisalready thecaseforthestatisn ^^,theCommunity should
undertake totransmit tothird count ries amendments tothe CCT
orNIMEXE and anydecisions concerning classification ofproducts
covered bythe agreement concerned that have been taken under the
procedures inforce inthe Community following theoptry into force
ofthe agreements . 'At
%X%
\
Subject tothespecial OPT arrangements .

*
-15-
%III.5.Specialarrangements
(a)OPTandIPT
(i)Outwardprocessingtraffic(OPT)
TheOPTarrangements mustbethesubjectofaprotocolannexed
totheagreementsspecifying :
>.-theconditionsforapplication ofthesystemwhichwillbe
,thoseprovidedforintheCommunityrules;
^pthemachineryforadministeringthesystem,whichwillbe
basedonthefollowingfourprinciples :
-appli^j^ionofthepriorauthorizationsystemasprovided
forinth^proposedCommunityrules,incloseconsultation
withsupplie^rountries,intheeventofunderutilization'
-afteracertainperiodoftheyear;
-theintroduction ofspecificquotas,forwhichtheaccounting
istobedonewhenprij&rauthorization isgiven.These
quotasshouldequalona&^age10%ofthequotaforordinary
imports,althoughtheymay^^yaccordingtothetotal
volumeofimportsofthe,prod«^inquestionfromthe
countryconcerned;volumeofimportsofthe.prodtffebinquestionfromthe
%
%
%%%

-inthe absence ofaspecific OPT quota ,application ofa
liberalized system subject toathreshold (5%ofthe quota
forordinary imports ),beyond which the Community reserves
theright tofix aquota following consultation with the
supplier country concerned ;
-the more favourable application oftheflexibility and
growth rates than forordinary imports .
Inward processing traffic (IPT)
f/-thebilateral agreements will apply theprinciple ofnon-
setting-off oftheproducts declared under IPT.
-they will specify that for such products tobereleased
later^for free circulation the imported goods must be
setoff^wrainst the quotas .
-itmust bespecified that thereimportation into the
Community ofproducts ^^viously .exported therefrom after
undergoing processing un^^the IPTarrangements which
confers Community originatirl^^tatus uponthemwillbecontingent upon thegoods' work^intheCommunity atthe
time ofthe IPToperation being duly released forfree
circulation andsubject toanysetting-off requirement .
Forthispurpose ,anyreimportation intc<^je Community
ofproducts originating therein maybemad^S^bject to
appropriate checks toascertain thatthispro\$^on has
been respected .Theprinciple onnon-setting -offunder
IPT arrangements will not apply ifequivalent compensation
isapplied . y*

-17-
(b)Fraud
Duringthecourseoftheoperationofthebilateralagreements
negociatedunderMFAII,alargenumberofcasesoffraudulent
importshavebeendiscovered.Thesecasesmainlyconcernedclothing
C>i
* importedwithafalselydeclaredoriginandfalsifieddocumentation
withtheobjectofcircumventing thequantitative limitsestablished
forsuchproductsunderthebilateralagreements.Whileacertain
numberofpracticalstepshavebeentakenbytheCommissionin
conjunction withMemberStatestoeliminatesuchpractices,
^^xperiencehasshownthattherelevantprovisionsofthebilateral^jjeementsshouldbeimprovedinthefuture,inparticularby
seedingtheactivecooperationofthepartnercountrybygetting
ittoacceptfullresponsibility forcorrectadministration ofthe
agreementandassisttheCommunityinitsinvestigations intocases
ofsuspectedTOaud.Consequently,thenewbilateralagreements
shouldincludetfk.followingpoints.
(i)Theprinciplethattheentirequantity(100%)ofgoodsfraud­
ulentlyimportedshouldbedeductedfromthequotaofthetrue
countryoforigin.^<0(ii)Extensionofthepresentpr^^sionsonadministrativecooperation
andorigincertificateverific^Jpninordertosetupasystem
forexchanginginformationonfra^?andtradeandproduction
statistics,mutualadministrative assistanceincludingon-the-spot
investigations wherethatprovesnecessary/andverification
"\
(iii)ThepossibilityofnegotiatingothermeasuresthaY/fovebecome
necessaryhavingregardtothecircumstances andthepartner
countryinquestion(registrationofexporters,double-checking •
procedureforsurveillance ofcertainproducts,etc.)%
Inthecaseoftextileandclothinggoodsimportedonthebasis*5
offraudulentdescriptionsorclassification,theprincipleoffull
accountingagainstthequotacorresponding tothecorrectclassification
shouldalsoapply.
Specialarrangementswillprovidethatimportsofcounterfeit
goodswillbethesubjectofconsultations .

(c)Handloom andfolklore products
The Council hasdirected the Commission tomaintain thepossibility
forthe Community toconclude satisfactory arrangements concerning
handloom andfolklore products .Theexisting bilateral agreements
lay down certification procedures andprovide inaccordance with
Article 12ofthe MFAthat goods certified under those agreed
procedures shall not bededucted from quotas fortheproducts concerned .
Additional arrangements exist with certain supplier countries .The
Commission does not recommend that the Community seek tonegotiate
any .basic changes inthe present system .■kT
Thepraj&^ions ofProtocol Btothepresent bilateral agreements must
bemaintained and strengthened byproviding forobligatory consult­
ations within amonth incases where the exporting countries and
theCommunity diffcyj astothenature oftheproducts .%%
Withregard tothepos^jgle needtodraw adistinction between
handloom /handicraft prodtT&s andproducts included onthe"folklore "
lists the corresponding certificates should bear aspecial mark
(e.g. bestamped )inthe case ofthelatter products .
%V(d)Price clause djv%
The Council asked the Commission inthe MFA negotiating
directives topreserve thepossibility forthe Community toH-negotiate satisfactory price clauses initsbilatei<^agreements .
TheTSBhastakentheviewthattheyareoutside the^§^eofthe
MFA.TheCommission considers thatpriceclauses haves^J/pda
useful purpose initsagreements with state trading countries
andalso inthe special circumstances ofthe agreement with
Peru .The Commission recommends the maintenance oftheprice
C/A
clauses inthose agreements but does notconsider that their '
inclusion inother agreements would serve any useful purpose .ζ

-19-
Also,where aprice clause isincluded inanagreement ,itshould
beapplicable ,irrespective ofwhere the goods are invoiced ,
toallproducts originating inand coming from that country .
e)Small non commercial consignments and samples Ε/ΟΠίαιιIΐυΜ1*<υΜΙΗΙΙ(?Ι IαIνν/»««?«Η· 11^Μ''Μ%>.–:–...........
Special provisions will beincluded intheagreements inorder to
allow exemption forsmall noncommercial consignments andsamples
from theprovisions concerning documentation tobepresented
(licences ,origin certificates ).V%
(f)Rera£|ion /revicw clause (seeAnnex VIII)
Inaccordance with itsundertaking atthe 720th Council meeting
held on13JuJ/r1981 the Commission has examined all aspects of
apossible recession mechanism .Theresults oftheexamination
aresummarized in^df^ex VIII.Inviewofthese results andthe
arguments putforward ^concerning therisks involved inincreasing
imports atatime when consumption isfalling very sharply ,
the Commission proposes thefollowing approach :%
-thelimits tobeagreed withtlra^rtner countries andthe
relevant growth rates must,asintjj^past ,takeaccount of
foreseeable consumption trends ,particularly for Group I"
products .
%-inorder toavoid overconcentration ofimports ^^thin these VJOLII%limits because ofcyclical fluctuations provision c3j^?uld be
.madeforcumulation ofthe"flexibility "possibi liti^f-to be
reduced inthe case ofthe most sensitive products from dominant
1suppliers .This seems particularly desirable forcarryforward
from thefollowing year 'squota .%\
seepoint III 2(a)above . <

-20
-Lastly,theCommissioncouldenvisage -proposingarecession/revision
•• .-..........
Clausewhichwouldenable,the?,agreedquantitative .limitsand..
S>- flexibility arrangements toberevisedaftertheagreements
havebeenappliedforacertaintime,in'order-totake'accountof
iconsumptiontrendsintheCommunity.Thisclause,whichwould
makeitpossibletorevisebycommonaccord-upwardsor
downwards-thequantitative limitsandflexibility percentages,
^couldbeinvokedfortheyearofapplicationoftheagreement
followingtheyearofinvocationoftheclause.
%
III.6.Specialarrangementsforfirst-timeandsmallsuppliercountries :
Specialarrangements mustbesoughtforfirst-timeandsmall
suppliercounl^jfsbasedontheconceptofdifferentiation between
supplier'countri^^adoptedbytheCommunity.Thespecificmeasures
fortheleastdevel^Cd,first-timeorsmallsuppliercountriescould
containthefollowingfeatures:
-thesecountriescouldbeeM^'blefor.higher-than-normalannual
growthratesforimportssubje^Jj^torestraint;
-thebaselevelswhichwouldbe.t^^pintoaccountforestablishing
newlimitsfollowingapplicationof^ie"basketextractor"
mechanismshouldtakeaccountofthesecountries',most.recent
exportperformances orbeofalevelequivalenttothelimits
already .agreedwithotherpartnercountries comparable
situation (seeAnnexVI).
-greaterlatitudewillbegiventothesecountries^^egardsutilizationoftheflexibilityclauses,includingtransfers
betweenshareswithintheCommunitylimits;
%%%

-21-
-theOPTsystemtobenegotiatedwiththesecountriesshould
takeaccountoftheirindustrialdevelopment requirements .
Theindustrialcooperationtobeachievedwiththesecountries
throughOPTshouldbeparticularly encouraged.
%
Generallyspeaking,agreementsconcludedwiththesecountries
shouldbeappliedflexibly,particularly withregardtonon-Group
Iproducts.
III.7.Generalprovisions
%
CalibrationoftheagreementsTf^Kommissionproposesthattheagreementsshouldinprinciple
lastfouryearsbutthattheexpirydateoftheagreements
shouldnevertheless coincidewiththatofMFAIII.
(b)Territorialapplication
TheCommissionpraisesthatthepresentarrangementsregarding
territorialapplication bemaintained.
IVCONCLUSIONS–
. %
TheCommissionconsidersthatthisCommunl^fionroundsoffthe
seriesofproposals-referredtointheintl^lluction-already
submittedbyittotheCouncilconcerningthetextilesector.It
feelsthattheCouncilnowhasalltheinformationitneedstotake
adecisiononrenewaloftheMFAandthenegotiation OT«Vthebilateral
textileagreements .\
Vf TheCommission drawstheCouncil'sattentiontothefactthatrtis
essentialformeasuresinconnectionwiththetextileimportarrangements
tobeaccompanied byappropriateactionintheindustrialpolicy
AJ\
fieldiftheCommunity'seconomicobjectivesinthissectoraretobefy*.
attainedinfull. V
TheCouncilisrequestedto:
-approvetheguidelinessetoutinthisdocumentforthefuture
arrangements togoverntextileimports;
-authorizetheCommissiontoopenonthisbasisnegotiations withthe
supplierthirdcountriesconcernedand,tothatend,adoptthe
attachedrecommendation foraCouncildecision.

LIST OF ANNEXES
ANNEX I TARIFF ASPECTS
ANNEX II GLOBAL CEILINGS
ANNEX III
ANNEXDIFFERENTIATION CRITERIA
PRODUCT CLASSIFICATION
ANNEX V
ANNEX VI
ANNEX VIISUPPLIER COUNTRIES WITH WHICH THE COMMISSION
RECOMMENDS THAT BILATERAL AGREEMENTS BE NEGOTIATED
BASKET EXTRACTOR "SYSTEM%
PROPOSED IMPROVEMENTS CONCERNING LICENCES AND
CERTIFICATES
ANNEX VIII RECESSION MEC^j&ISM
*/>X
%%
%%

ANNEXI
TARIFFASPECTS
AttheendoftheTokyoRoundtheEuropeanCommunitydecidedtoestablish
aLinkbetweeneffectiveapplicationofthetariffconcessions inthe
textileandclothingsectorandamutuallyacceptablearrangement regarding
international tradeintextiles.Thisdecision,takeninthelightof
asimilarpositionadoptedbytheUnitedStates,readsasfollows:
^jkheCommunityhastakennotethattheUnitedStatesmake
maintenance oftheirtariffconcessions inthetextile
seft&rdependantonthecontinuationofsatisfactoryarrange­
mentsfortradeintnissector.Intheseconditions,and
takingintoaccountthedifficultsituationofthissector,
theCommunityreservestoitselftherighttoreviewinits
turnitsownconcessionsintheabsenceofamutuallyaccept­ablearrangem^tconcerningtheinternationaltradeintextiles."'Sk. textiles."ufo
•IForpracticalreasonsacfq^siononthecommoncustomstariffstobe
appliedfrom1January1982mustbetakenintimeforthetariffsto
bereadyforprintingby15November1981.TheCouncilwilltherefore
havetosettlethismatterduringt^jjfirst-fortnightofNovember.
TheCommissionintendstotransmitap&feposalonthismatter.igRosa%
%%%%
X

Annex
\\
%X
LOBAL CEILINGS
%%%
%%\

 
GLOBAL CEILINGS :MFA AND AUTONOMOUS REGIMES
.CAT.1tonnes
6R0WTH RATES s0.5%r
1983 27.200
1984 27.260
1935 27.340
1986 27.420
1987 27.50D3.76D
8.860
3.930'
»
9,090
9.200I
15.800
15.340
15.370
15»?00
15.930
^EML
12.730
12.740 ^
12.^
12.780
12.810UX
^y>?.230
9.420
9.540
9»660
9.780ÏRL
3.150
3.160
3.160
3.160
3.170DX
1.570
1.590 -
1.Ô10
1.630
1.650SR
330
340
350
260
a?oI€CE
79.320
79.710
C0.110
"0.200
30.910 -RESERVE
1.000

»
ÎS-
GLOBAL CEILINGS :MFA AND AUTONOMOUS REGIM&
CAT.2
Base level 1982 :
GROWÏi !RATES :0.5X
0nSL UK ÏRL
1983
1984
1985
1986
198736.740
37.140
37.560
37.980
33.42021.740
21.980
22.220 .
22.470
22.72023.380
23.970
29.060
29.150
29.27017.400
17.500
17.600.s£ >,,7#
17.7201^53.440
M 63.470.390
63.490
63.5503.370
3.370
3.370
3.370
3.870DX
9.040
9.050
9.060
9.060
9.070GR
1.740
*1.760
1.780
1.800
1.830132.790
183.710
•134,620
135.530
186.450tonnes
RESERVE
.2.000

GLOSALCEILINGS:TIFAANOAUTONOMOUS RE6IMES
CAT.4
■<*1COOpieces
GROUTHRATES: GftOWTHRATES:3-8%
P^YFars'I If
1983 57.530'
<1.310)34.200
(1.070)3.890
(220)
1984 58.810
(1.310)-35.230
(1.070)10.000
(220)
1985 60.110
(1.310)36.280
(1.070)11.230
(220.1
1986 61.460
(1.310)37.370
(1.070)12.790
(220)
1987 62.790
(1.310)38.460
(1.070)14.540
^•.(220)
1983 6.220
(1.310)1.370
(1.070)dGO
(220)
1984 6.590
(1.810)1.980
(1.070)640¿&0)
<¡^680^(220)
730
(220)1985 6.980
(1.310)2.100
(1.070)
1986 7.400
(1.810)2.230
(1.U70>^
1987 7.850
(1.810)2.360
(1.070):760
(220)DML UK ÏRL
18.120
(660)
18.870
C66Q)
19.660
(Ô60)
20.400
(6<SD)^
21.15QS£>'40.600
(1.770)
42.300
a.?7Q*$>
44.060îl.770)
45.720a.770)
47.400
(1.770? 50)DK
5>
830
(30)5.520
(120)
930
(30)5.690
(120)
.020
(30)5.880
(120)
.020
(30)6·.060
(120)
.220 6.250
(1cu>
wtRALLOPT OBJECTIVE:MFAA?ÎOAUTCrjCMCUS REGIMES
1.470 2.040 50 390
«660)(1.770) (30)(120)
1.560 2.160 50 410
(660).(1.770) (30)(120)
1.650 2.290 50 440
(660)(1.770) (30)(120)
1.750 2.430 50 470
(660)(1.770) (30)(120)
1.860 '2.570– 60 :490
(660)(1.770) (30)(120)
ThefigurriS5>*fr ,bracketsrepresenttheOPTquantities
whichtwxVbedeductedinpartfromtheceilingsforforeseenwiththedominantsuppliers,
ordinaryimports.GR CEERESERVE
'400 166.090.*4.000
(10) (5.690)
ψ
570 172.410
(10)Í5.690) »--
690 178.930
(10)(5.690)
820 135.740
(10)(5.690)
970 192.790
(10) (5.690)
·–
10 12.650
(10)(5.690)
10 13,400
(10)-"(δ.690):– '■
20 14.210
(10)(5;690)
20 15.070 Λ.–■
(10) (5.690)
:20 15.970
(10) (5.690)

#'
GL03ALCEILINGS :MFAANDAUTONOMOUS REGIMES
CAT.6
GIÎOWTHRATES:4.0%1CCOpieces
ÏLARS]0IF
1933 38.340 9.530
(2.500) (3S0)
1934 39.030 10.730
(2.500) (380^
1935 39.770 11.880
(2.500) (330)
1936 '.0.500 13.130
(2.500) (380)
1937 41.280 14.420
(2.500) (330)
1933 4.940 430
(2.500y (380)
1934 5.240 460
(2.500* (380)
19S5 5.560 480
(2.500) (380)
1936 5.890 510
(2.500) (380)
1937 6.249 540
(2.500) (380)I
3.230
C2C0)
9.250
(200)
10.240
(200)
11.323
(200)
12.430
(200)
/.50
€200)'
430
(200)
4sa^
^80
*Q&200)#510
(200)3ru.
12.850
(5£0)
13.130
(580)
13.490
(520)
13.850
(580)
14.230'
(520)ux
28.880
(2.410)
29.520
(2.410)
30.340
(2.410)
31.140
(2.410)i
<20)
i5s?o|
(5G0)l>^1.990
ftp(2.41
1.630
(530)
1.730
(580)
1.330
(580)
1.940
(580)(2.410)
OVERALLOPTOBJECTIVE
450
(2.410)
480
(2.410)
510
(2.410)
540
(2.410)
570
(2.410)
Thefiguresinto«cKetsrepresenttheOPTquantitiesforeseenwiththedominantsuppliers,
whichwillbe^festictedinpartfromtheceilingsforordinaryimports.iRL|OKjGftjCEE~~~~jRESERVE
4ê&4.250 410102.S90•4.000 '
SjSO)(270)(20)(6.333)
'450 4.310 590 107.C10
(20) (270) <20) (6.3SO)
510 4.390 660 111.230
(20)(270)•(20) (6.3S0)
570 4.470 750 115.730
(20)(270) (20)*(6.330)
640 4.540 340 120.370
(20) (270) (20) (6.380)
ÎVE ,
20 140 10 7.930
(20)(270) (20) (6.380)
20 150 10 8.420
(20) (270) (20) (6.3SC)
30 150 10 é'.930
(20)(270) (20) (6.380)
30 170 10 9.460
(20) (270) (20) (6.380)
30180l1010.020
(20)(270)5(20)(6.380)

GLOBAL CEILINGS :MFA AND AUTONOMOUS REGIMES
GROWTH HATES :1.5X CAT.7
I""YEAKST D~T F f"~" 1 | BNI j UK ~{7~l*Z | OK
1933
1934
1985
1986
1937
19S3
198*
1985
1986 .
198740.190
(2.340 )
40.430
(2.340 )
40.770
((2.340 )
40.990
(2.340 ),
41.250
(2.340 )
5.240
(2.340 )
5.37fr
(2.340 )
5.500
(2.340 )
5.640
(2.340 )
5.780 .
(2.340 )10.410
(280)
10.840
(280)
11.270
(280)
11.710
(280)
12.160
(280)
670
(280)
680
(280)
700
(280)
720
(280)
740
(280)5.840
(130)
6.140
(130)
6.430
(130)
6.730
(130)
7.050
(130)
'îZO
(130)
430
(130)
440
<130^
<Qyl30 )
^460
(130)11.190
(550)
11.350
(550)
11.500
(550)
11.650
Î5S0 )
11.CC0
(550)
OVERALL CRI
1.42CLCÎV'
1.450
(550)
1.490
(550)
1.530
(550)
1.570
(550)29.220
(1.250 )
29.450
<1.250 )
29.700
(1.250 )
29.940
1.250 )
30.190
(1.250 )
JECTIvE
1.640
(1.250 )
1.690
(1.250 )
1.730
(1.250 )
1.780
(1.250 )
1.820
(1.250 )290
(10)
310
(10)
320
tsf
(10)
350
(10)
20
(10)
20
(10)
20
(10)
20
(10)
30
(10)GR
Υ.640
<110)
2.710
<110)
2.730
<110)
2.850
<110)
140
<110)
140
<110)
140
<110)
150
(110)
150
<110)
Thefigure^^i brackets represent theOPTquantities foreseen with thedominant suppliers ,
which wi^C§>>De deducted inpart from theceilings forordinary imports .1000 pieces
CEE
210 99.920
(5) (4.670 )
240 101.400
(5)* (4.670 )
280 102.920
(5) (4.670 )
320 104.460
(5) (4.670 )
380 106.030
(5) <4.670 )
110 9.56q
(5) <4.570 )
10 9.790
(5) <4.670 )
10 10.030
(5)
...(4.670 )
10 10.30.0
(5) (4.680 )
10 10.560
(5) (4.670 )

GLC3AL CEILINGS :HFA AND AUTONOMOUS REGIMES#
1CCO pieces
CAT.8
GROWTH RATES :1.5%
YE/.RS I 0 (
1983 72.230
(4.590 )
1934 72.920
CM >-
1935 73:200
<" >
1936 73.620
<" >
1987 73.960
<" >
1933
··.9.520
(4.590 )■
1984 9.760
<" >
1985 10.000
<»)
1986 10.250
<»)
1987 10.510
<»)19.&2C
(350)
11.210
<" )
11.750
<")
12.350
<")
12.880
<")
.590
<350 »
610
C••)
620
f»)
640BNL υκ 1RL
12.030
<360)
12.410
{")
13.010
(")13.100
α.160)
18.410
<")
15.660
<")43..90
12.710 )
44.450 .«X
44.9?0 >^
<" > 1690
<")#Τ10>
690DK
730
<")
760
C)
C»)
660*
C»)
Thefigures^*brackets represent theOPTquantities foreseen withthedominant suppliers ,
which wiisyje deducted inpart from theceilings forordinary imports .^ _ –13.550 18.920 I 45.540 760
{.") <">I <" > <")
14.060 19.150^ 46.230 800-•<") <" l" > c">
OVERALL OPT CBJECTI'gSjWIFA AND AUTONOMOUS REGIMES GROUTH 2.5%^ –5.950
<290)
6.020
<")
6.070
<")
6.140
<")
6.370
<")
790
<360)
310
>#830#"•'^ 850
<">
870
< )??3.720
<1.160 )
3.810
<" ■)
3.910
<")
4.000
<« >
A.100
<••)1=540
<2.710
1.580
<"
1.620
<"
1.660
<"
1.700
<-50
(10)
50
<">
50
<">
50
<")
60
<">270
<290,
280
<" )
280
<" )
300
<")
<" )GR
260
<10)
320
<">
370
<">
440
<")
460
«">
10
09
10
C)
10
c>
10
?•)
10
r>| CEE j~RESERVE
I163.830 xI5.000 163.830
<9.480
156.300
<"
163.790
<"
171.330
<"
173.910
<"
.16.490
P.480)
16.910
<,J >
17.320
<»)
17.750
<")
18.210
<")

CLC3AL CEILINGS :MFA AND AUTONOMOUS REGIMES1000 pairs
'ËARS
1983
198;
1935
1936
193?
1933
1984
1985
1986
1987GRQWTH RATES :1.5%
33.040
(6.730 )
S3.960
<")
39.780
(")
90.840
i")
92.230
<")
5.33 )
C6.720
5.700
î"
6.0^0
("
6."400('"
6.790
("32.5^0
(910)
34.790
(")
37.140
(")
39.510
<" >
41.630
(")
2.30
(910)
2.490
("3
2.630
("}
2.790
(••;
2.960
/ •« ««24.130
Π.170)
25.990
C")
27.950
(*•)
29,760
X" >
31.340
(")
1.250
Cî.170 >
1.320
«-
^. 480
1.570
<»•>CAT.12
ENL UK 1RL
26.120
(1.670 )
26.700
(")
27.260 '
(")
27.910
C")
23.670
i")21.490
(1.490 )
23.960
(")590
£30)
26.640
(»)'SV
29.300
<")
32.130F
#<" 1730
<")
320
{")
920
{")
OPT 1C9JECTIVE
950
Î1.670 ;
1.000
C" )
1.060
(" )
1.130
<" )
1.800
(.. >660
(1.490
700
< M
740
("
790
(..
830
(..30
<30)
30
C.,)
30
(..)
40
<..)
40
(..■)DK
14.900
(870)
14.900
(")
14.900
(")
14.910
(H)
14.920
(")
630
(£70
660
('"
700
("
740
("
790
C"
The figures inb
which will beclJckets represent the OPTquantities foreseen with the -dominant suppliers ,
cted inpart from theceilings forordinary imports .430
(10)
590
(")
310
(">CïE
203.2i0
(12.330 )
216.550
225.210RESERVE
<6.250
970 !234.220
(")
1.160 243.590
.JL.... »
40 11e230
(10) <12„SSO)
40 11.94P
î") ('"'·· ")
40 12.'640
(") (.·; )
40 13.410
(M) <" )
50 14.830
(") (·>)

GLC3AL CEILINGS :HFA AND AUTONOMOUS REGIMES
CAT.21
GRCWTH RATES :4%
reiS^brackets rePresont the0PTquantities foreseen with thedominant suppliers ,
Igpre deducted inpart -fromtheceilings forordinary imports .| ^YEARs ) 0 j ^ j * j 8-\» | UK j IRL j DX [ GR
I I çCSj
I1933 18.970 5.200 2.220 4.940 I10.730 3^§3.2
j (1.370) (130) (50) (200) (750)f^> <
9ionl io551 - eT/n 5r.7n *un n JÎxr1933 18.970 I 5.200 I2.220 !4.940 110.730 JC*S20 I1.920 8 140
(1.370)| (130)I (50) 3 (200) 1 (750) (5) 1 (140) 3 <5)
1984 19.220 - 5.740 I 2.370 I5.110 I11.180 130 I1.950 8 170
<") S c) Ic*) <") sc*) NSr) i(") S <")
1985 !19.460 I 5.320 \2.030 l5.230 f11.640 I 150 11.970 "f 210i (»> j (.«> | (») a{••> |(••) Ja !(") S (">
1936 I19.680 J 6.940 8 3.210 I5.420 112.090 I 170 B2.C00 1 250(••> !i") <••) (") ■ Lv<") <") I(") I (">
19S7 I19.870 I 7.610 I3.5S0 -I5.700^T2.550 I 190 I2.020 I 300
<") \ (.") ς.*;> <")Λτ ("> ο I(") | (">
O.-TOBJECTIVEII I Ix?' ' I I S1.830 I 500 J 130 I ,SS9 | 330 I 10 1 50 j
(1.370 )i (180) (50)|X&0)'I(750) I (5) I(HO) J
1984 I 1.990 8 530 I 190 } 550 5 350 I 10 I 50(1.370 ) I (130) (50) (300) I (750) 5 (5) 1 (140)
1985 I 2.110 ! 560 J 205 I 580 I 370 j 10 5 60
(1.370 ) J (180) (300) 1 (750) I (5) } (140)
1986 2.240 600 620 390 10 60 I
(1.370 ) (180) (50) (300) (750) (5) (140)
1987 2.370 630^^ 220 660 420 .10 70
(1.*370) (180) (50) (300) (750) (5) (140)TCOO piece «
~cYè
*
•',4.300
(2.300 )
46.070
47.710
49.G30
51.220
10 3.430
(5) Í2.200 )
10 3.530
(5) (2.300 )
10 3.900
(5) (2»200 )
10 4.140
(5) (2.300)
10 4.390
(5) (2.800 )HESERVî
1.330
V.'
Il

#
GLOBAL CEILINGS :MFA AND AUTONOMOUS REGIMES
CAT.73
I YEARS
1933
1934
1985
1986
1987
1983
1984
1985
1986
1987GROUTH RATES :4X
3.470
(130)
3.510
(180)
3.570
(180)
3.620
(180)
3.670
(1C0)
450
(180)
480
(180)
510
(180)
530
(1*80)
560
(180)
rhefisure^jXPiwhich wiLl\re <1.360
(30)
1.460
(30)
1.570
(30)
1.670
(30)
1.790
(30)
110
(30)
120
(30)
120
(30)
130
(30)
1401C00 PIECES
CNL
490
(20)
540
(20)
610
(20)
680
(20)
760
(20)UK
30
(20)
es?™(20)
40
(20)
40
(20)1.490
(50)
1,500
(50)..
1.520
(50)
1.540
(50)"
1.560 <#
100
(50)
110
<50)
120
(50)
120
(50)
130
(50)2.000
(90)
2.120
(90)
2.240
(90)
«.360
>(90)
2.490
(90)^>. 1?
SO
(2)
>0
(2)
ICO
(2)
100
(2)
QVERALL GPT OBJECTIVE
110
(90)
120
(90)
120
(90)
130
:(90)
140
(90)S
(2)
5
(2)
5
(2)
5
(2)
5
(2)DK
380
(15)
390
(15)
400
(15)
410
(15)
420
(15)
20
(15)
20
(15)
20
(15)
30
(15)
30
(15)G3
90
(3)
100
(3)
110
(3)
5
(3)
5
(3)
5
(3)
5
(3)
5
(3)
The figure Wibrackets represent the OPTquantities foreseen with thedominant suppliers ,
pededucted inpart from theceilings forordinary imports .CEE «¿SERVE
9.330 -
(390)280
9.680
(390)
"0.090
(390)
10.480
(390)
10.900
(390)
- • *?-'Τ–*.
330
(390)-
890 '>
(390)•β·»–'*
930
(390)
990
(390)
1.050
(390)

ANNEXIII
DIFFERENTIATION CRITERIA
TheCommissionproposesthatinthenegotiation ofthenewbilateral
textileagreements,theCommunityusetheconceptofdifferentiation
basingituponthefollowingcriteria:-
1.PrimaryCriteria%
(i)markCT^hareofsuppliercountry,overallandbytypeofproduct
(textil^sjP'clothing )
(ii)degreeofdevelopment ofsuppliercountry,measuredintermsof
GNPpercapita.
2.CorrectiveCriteria
(i)thenatureofthesuppliercountry'sexports,havingregardin
particulartothequestionofwhetherornotthesuppliercountryis
acottonproducer(MFAArticle6#0)and.tothevalue-added contentof
theproduction;
(ii)theconditionsofaccessforCommunity^jjports tothesuppliercountry's
market.
%%
%

/ANNEXE IV
PROPOSED COMPOSITION OFGROUPS
%
X ?Hiqhly sensitive
A„Textiles :Categories 1,?.a
B.Knitwearondclothing:Categories 6,7,8,,12,,21,73,
GROUP II%
îtive
A.Textiles :Categories 3,9,20,22(incl .22A),32Unci .32A)
0„Knitii /earandclothinn :Categories 5,13,K,IS,16,17,18,19,
?M,25-26-27,29,30,31,76,78,81,83.
%>Exf^r
0.Clothinq :Exist fifoCroup IMplus 10,11and28,Less 73,76,78,
V '
£1*
c.Industriai TorttUor ,;f-jtistinn Crou ?>V,'/V.
GROUP III:A.Textiles :ExTOâng Group XXXpUir ,23ler.s 32*
CHANGES :A'dded to^GroupJi%XL •
eCategori es*™® ,(Soehs ),21(Aroraks ><
73(Trac!' .îui^î .
Added toGroup II ' sCategories 3(Synthetic staple fabrics ),5
•(Pullovers ),32(Pile^j-ics),76(Worfcwear ),
78(Men'sotherwovenclo$^g),81(Women's
othorwovenclothing),,03(Of^J^r knitted
Clothing ),
Proved from Group IIxCategories 10(Coated gloves ),11(Uncoated
cloves ),23(Rayon spunyarn)„28(knifed
t:rousorr .>« Jto.%

/y//
InstancesuhereCategoriescouldwithadvantagebemergedorelistedbelou.
10and11Knittedgloves
&14Aend15'ACoatedcoats
UDand150Kon-cooted coats%'16and75...Men'ssuits
'18/30A/300•Wovenundergarments otherthanshirts
19and89Handkerchiefs
«
«>and25Men'sandwomen'sknittednighti^r
29^Ij^nd74Women'ssuits
68/71^^BobiesSclothing
72and7-9.Knittedrsndwovenswinwear
%%
%%%%
\X%
%%%
\

rw-ry -v
Supplier countries with which the Commission recommends that bilateral
agreements benegotiated .
Argentina
Bangladesh
Brazi l
Bulgaria
>Chinao
■^fc^olombia
reéchoslovakia
Egypt
Guatemala
Haiti
Hong Kong
Hungary
India
Indonesia
Macao%Malaysia
Mexi co
Paki stan
Peru
Philippines
Poland
Romania
Singapore
South Korea
Sri Lanka
^S^Thai land
^Ètuguay
Yugoslavia
Czechoslovakia
%
Comments%%
-Itshould benoted that Bulgaria and China are not MFAmembers%
The agreement with China expires on31/12/83.
.The EC/Yougoslavia cooperation agreement signed on2April 198^an Belgradeestablishes acommercial andpreferential regime foralltextile products .-
However Art.17ofthe Agreement provides initsfirst paragraph that :
"This agreement shall notaffect theprovisions ofthe Agreement concerning
"trade intextiles between Yugoslavia andtheCommunity concluded inth|^
"framework oftheArrangement regarding International Trade inTextiles .*^,
The second paragraph ofthis Article provides that :
"Nolater than sixmonths before theexpiry oftheabove mentioned Agreement ,^
"theContracting Parties shall determine the arrangements tobeapplied to
"textile products subsequently ."

ANNEXVI
Thebasketextractorsystem
TheCommissionproposesthatthesystemofintroducing aquantitative
limit,asprovidedforinthepresentbilateralagreements (the"basket
extractor"system),bemaintained.Itis,however,proposedthatthe
1mechanismbeamendedasfollows:'
(a)J^hpngofprovisionallimits
Although^Jj^textsintheexistingbilateralagreementsenablethe
Communitytofixprovisionallimits,suchapracticehassofarbeen
theexceptiontotherule.TheCommissionproposesthataclausein
theagreementsben^jtiatedwiththesuppliercountriestotheeffect
thatasageneralrul^^enarequestforconsultationismadewitha
viewtointroducingaqualitativelimittheCommunitywillfixa
provisionallimitforthenextthreemonthsnotlowerthantheprorata
figureforthesuppliercountry'sexportsduringthe12monthsofthe
precedingcalendaryearorlessthanaquarterofthebasketextractor
thresholdinthosecaseswherethere(^enosignificantimportsduring
theprecedingyear.TheCommunitywi114j^erthelessstillbeabletocall
forexportstobesuspendedbutwouldusefacilityonlyinexceptional
casesvis-à-visdominantcountries.
\•
(b)Fixingofa'definitive limit A.
TheCommissionproposesthattheprovisionconsideredundefi*£,a)should
alsostipulatethat,shouldtheconsultationsabortorfail^sproduce
resultswithinthethree-monthperiod,theCommunitywillbeentitled
tointroduceaquantitative limitonanannualbasisnotlowerthanthe.
basketextractorthresholdnorlessthan106%ofimportsduringthe12^>
monthsoftheprecedingcalendaryear.Ifnecessary,suchalimitwould *
berevisedupwardsinthelightofthetrendoftheCommunity'stotal
importsoftheproductinquestion.
1
ThespecialprovisionslaiddownintheagreementwithChinawillbe
maintained .

-2" ANNEX VI
Inview ofthe recommendation that the mechanism bestrengthened ,,
the Commission proposes that the percentages applicable fortriggering
the mechanism berevised asfollows :
Group I Group II Group III
General rate CO.2%)0.5% (1.5% )?.5% (4%) 5% sner%nnrrnà(per%»r>tage ofall extra-EEC
importt »^
State-trading countries (0.2% )0.2% (1.2% )1.2% (4%)4%
Hong Kong *5^South Korea ^
Macao
Taiwan ^(0.2% )0.2% (1.2% )1% (4%) 3%
()=rate atpresent applicable tomfyt supplier countries .
%
Forstate-trading countries these percentages also apply tolinen and
ramie products ,
%%

PROPOSED IMPROVEMENTS REGARDING LICENCES ANDCERTIFICATES
TheCommissionproposesthatinthenegotiations forthenewtextile
agreementstheCommunityshould,,inordertofacilitateadministration
ofimports,endoavourtoobt.iinthefolLouinqimprovements tothepresent
systemoflicencesandcertificates .
(a)Numberingsystemforexportlicences(Protocol A)
^kissystemshouldprovidefor:
r%,
i)a^odeidentifyingtheimportingMemberState,and
ii)aserialnumberidentifyingthetransaction .Thissystemshould
alsobedesignedtotakeaccountofthefactthatinsome
exporting$^itriestherearedecentralizedsystemsforissuing
exportinglic^^ps«%
(b)Indicationofcategoriesintheexportlicences(Protocol A)
Certainexportingcountriessojjf^imesenteranumberofproductcategoriesinthesameexportli^jfkpe.
ThenewagreementsshouldstipulatethsS?anexportLicencemaynot
covermorethanonecategory.
(c)Verificationoftheauthenticityofexportlicencj^(ProtocolA)and
ofcertificatesforhandicraftandfolkloreproducl^XProtocol B)
Provisionsregardingtheverification oftheauthenticity ofthe
licencesandcertificates inquestionshouldbeintroducedinthe
newagreements . ^%
Theseprovisionswouldbesimilartothosealreadyexistingforthe
verification oforigincertificates .

ANNEX VII
(d)Additional information tobeentered inthe export licences and
certificate s
Itisproposed that theexporting countries sho-ild indicate onthe
documents inquestion whether they are theoriginals /copies ,etc..
(e)Validity ofthe export licences
acknowledging that third countries should not beasked to
indi^Sj^anexpiry dateintheexport licences theCommission
nevertheless feels that thenewagreements should contain provisions
fordealing with certain problems encountered here bythe Member States .
Itistherefore pT^psed thatwhere noexpiry dateisgiveninan
export licence ther^^er State concerned berequired toissue an
import authorization arf^to import thetextile products inquestion
upon presentation ofvalid documents (bill oflading ,forinstance )
dated nolater than thelast dayofthe quota year stated inthe
licence inquestion .Inapplyingj^iis principle theCommunity should
takeaccount ofdelays inshipping^^dsduetoforcemajeure
*.(striked ,bad weather ,etc.).. *
(f)Amendment and cancelling ofexport licences bythesupplier countries :
procedures and conseq uences
Thecommunication ofthese amendments andcancel latiorc&^hould be
systematic andmorerigorous thanatpresent .Itisalsd^^poposedthatthenewagreements explicitly stipulate that,after certain
export licences have been revoked bytheexporting countries ,the
Member States inquestion maycancel thecorresponding import ^
authorization .Furthermore ,iftheexporting countries failtonoti^fe^
revocation until after thetextile products referred tointheexport <
licence have been imported thequantities oftheproducts inquestion
will besetoffagainst thequantitative limit forthe category
and quota year referred toineach cancelled export licence .

Arovin
RECESSION CLAUSE
/V 1.Atits720thmeeting.hel,don13July1981,theCounciladopted
thedirectivesforrenegotiation oftheUFA.Jrastatemententered
.intheminutesofthatmeetingtheCommissionundertooktoexamine
allaspectsofapossiblerecessionmechanism.Thisannexsummarizes
theresultsoftheCommission'sexamination .
entsinfavourofarecessionmechanism
-Arecessionmechanismwouldmakeitpossibletotakeaccountof
contraction ofthemarket.Ifitprovedeffective,itwould
enabletheCommunitytotake,assoonassignsofdifficulties
onamarketappft^foragivenproductalreadysubjecttorestraint,
thenecessarymeas^^inagreementwiththepartnercountriesto
avoidtheadditionalnfekswhichmightbeinvolvediftheimpact
ofimportsincreased. .
-Arecessionmechanismcouldalsafcjpeinvokedintheeventofareduction^ake
tufÔjftcn%
3.Theargumentsagainstarecessionmechanisminconsumptioningeneralandcouwi^akeitpossibletoadjust
importopportunitiestothenet!/situ^jfcen.
-Experienceshowsthatinarecessionmarketforce^^eadtoafall
inimportsalthoughitisnotalwaysaslargeasth^^llin
,consumption .
-Thenegotiationofarecessionmechanismwiththepartnercountries
wouldprobablymeanthat,inordertobeacceptedbythelatter,jj^t
shouldbeabletoworkbothways.Shouldthedifficultiesexistinc^^
ontheCommunitymarketdisappearforoneormoreproductsor^
shouldconsumptionoftextileproductsandclothingincrease,the
partnercountrieswouldbeabletoasktheCommunitytoimprove

-2- ANNEXVIII
accesstotakeaccountofthechangeinthesituation.Suchastep
wouldnot,however,beintheinterestsoftheCommunityindustry,
whichitselfwantstobeabletoreapthebenefitsofgrowingdemand
inaperiodofeconomicrecovery.
Itwouldbeextremelydifficulttooperatesuchaclause,asitcould
comeintoeffectproperlywhentheeffectsoneisseekingtoavoid
^realreadyreceding.Suchamechanismwouldthereforeriskhaving
l$0^nticycliceffect.Inanycase,aconsumption-linked mechanism
woutfS^ertainlynotprovideanyaidforindustryifconsumptionweretopickup.
Anumberofothertechnicaldifficulties couldariseinapplyingA.thismechanism.ordertobeabletoinvokethismechanismagainst
thepartnercountr^^itwouldbenecessarytoestablishthatthedifficultiesencounter^areprimarilyattributabletoadropin
consumption .Itwouldbeextremelydifficulttobeabletoevaluate
suchatrendingoodtimeonthebasisofexistingstatistics.
Consumptionfiguresareestablishedbytakingproductionstatistics,
addingthose,forimportsanddedu$^c|tTioseforexports.While
importandexportstatisticsshouldb^jj^vailablewithinthreemonths,productionstatisticsare,however,gen^&llyavailableonlyverylate
andarenotcommunicatioed totheCommissionbytheMemberStates
onaregularbasis.Moreover,theyarenotestablished according\%
Thesettingupofasystemprovidingforperiodicstati^^palinformation
onproductionwouldcallforasubstantiallogisticaleffortbythe
MemberStatesandtheCommunity.TheCommissionacknowledges the
advantageswhichsuchinformationcouldaffordandispreparedto^tudy
waysofimplementingsuchasystem.Itmust,however,admitthatfyp
suchaninformationsystemwouldtakeafairlylongtimetosetupancf?^
couldnotbeoperational bythetimethebilateraltextileagreements
cometoberenegotiated .

AlwJFX VIII
-Such amechanism would also runcounter totheprinciple ofguaranteed
access toCommunity markets forthird countries ,,which has been one
ofthe main arguments used sofar bythe Community forgetting its
partner countries toagree tovoluntary restraint agreements .
Solution advocated bythe Commission
Inthelight ofthe above points the Commission proposes the approach
d^&p'bed inSection III.5(1)ofthispaper .X%
%
X%%%
%% ■

Recommendation foraCouncildecisionauthorizing theCommissionto
negotiatetherenewalofhiIatoralagreementsundertheArrangement
RegardingInternational VradeinTextiles
TheCounciloftheEuropeanCommunities ^
HavingregardtotheTreatyestablishing theEuropeanEconomic
Community-andinparticularArticle113thereof.
Havinw^egard totheRecommendation fromtheCommission,%
Whereasnegotiations aretoopenbetweenthepartiestothebilateral
agreementsregardingtradeintextileswithaviewtopossiblerenewing
thoseagreementsa#^r31December1982;
WhereastheCommunity participate inthosenegotiations,
Hasdecidedasfollows:
Article1V
TheCommissionisherebyauthorized -tonegqjj^aterenewalofthebilateral
agreementsregardingtradeintextiles.
Article2 /x
%0
TINJ• ILL IJ_J.1 J_J_J_• J.ITheCommissionshallconductthesenegotiations onthebasjkofthe elementsin
itsCommunication C0M(81)556finalinconsultation ,withthewrticle 113
Committee.
%
DoneatBrussels ForthePresident &/,