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Vol. 1985/01 33 
  
 
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Conformém ent au règlement (CEE, Euratom) n° 354/83 du Conseil du 1er février 1983 
concernant l'ouverture au public des archives historiques de la Communauté économique 
européenne et de la Communauté européenne de l'énergie atomique (JO L 43 du 15.2.1983, 
p. 1), tel que modifié par le règlement (CE, Euratom) n° 1700/2003 du 22 septembre 2003 
(JO L 243 du 27.9.2003, p. 1), ce dossier est ouvert au public. Le cas échéant, les documents 
classifiés présents dans ce dossier ont été déclassifiés conformément à l'article 5 dudit 
règlem ent. 
In accordance with Council Regulation (EEC, Euratom) No 354/83 of 1 February 1983 
concerning the openi ng to the public of the historical archives of the European Econom ic 
Community and the European Atomic Energy Communit y (OJ L 43, 15.2.1983, p. 1), as 
amended by Regulation (EC, Euratom) No 1700/2003 of 22 September 2003 (OJ L 243, 
27.9.2003, p. 1), this f ile is open to the public. Where necessary, classified documents in this 
file have been declassified in conformity with Article 5 of the aforementioned regulation.  
In Übereinstimmung mit der Verordnung (EWG, Euratom) Nr. 354/83 des Rates vom  1. 
Februar 198 3 über die Freigabe der historischen Archive der Europäischen  
Wirtschaftsgemeinschaft und der Europäischen Atomgem einschaft (ABI. L 43 vom  15.2.1983,  
S. 1), geändert durch die Verordnung (EG, Euratom) Nr. 1700/2003 vom 22. Septem ber 2003  
(ABI. L 243 vom 27 .9.2003, S. 1), ist diese Datei der Öffentlichkeit zugänglich. Soweit  
erforderlich, wurden die Verschlusssachen in dieser Datei in Übereinstimmung mit Artikel 5  
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COMMISSION Brussels, 27 iu n e  1985
OF THE
EUROPEAN COMMUNITIES
G eneral S ecretariat
COMMUNICATION F R O M  THE COMMISSION TO  THE COUNCIL O N  THE 
RENEW AL O F THE ARRANGEMENT' REGARDING INTERNATIONAL 
TRADE IN TEXTILES (MFA)
C 0M (85) 328 final

Coif 31$
C O M M U N IC A T IO N  F R O M  T H E  C O M M IS S IO N  T O  T H E  C O U N C IL  O N  T H E  
R E N E W A L  O F  T H E  A R R A N G E M E N T  R E G A R D IN G  IN T E R N A T IO N A L  T R A D E  IN TE X TILE S
Introduction
T h e Arrangement regarding international trade in textiles (M F A ) expires o n  
3 1  July 1986. In accordance with Article 10, paragraph 5, of this Arrangement,  
the G A T T  Textiles Com m ittee h as to m eet in July 1985 to consider whether the  
Arrangement should b e  extended, modified or discontinued. T h e discussions o n  the  
successor regim e to the current M F A  should, therefore, begin in July of this  
year.
It is unlikely that all the participants in the July meeting of the G A T T  
Textiles Com m ittee will indicate their definitive positions o n  the future  
regime. Nevertheless, the Com m unity, for its part, should define the broad  
outline of its position, particularly since this position will influence the  
attitude of other participant countries, a s  well a s  the general course of  
the forthcoming negotiations.
T h e C om m ission considers, therefore, that the time is ripe for the definition,  
in general terms, of the Com m unity's principal objectives. W eight is lent to  
this opinion b y  the various manifestations of protectionist pressure in certain  
industrialised importing countries. Continued uncertainty over the future textile  
trade regime ca n  only serve to reinforce this pressure.
T h e present Com m unication deals with the prospects following the expiry of  
the present M F A . Since at this stage the C om m unity needs to adopt only a n  
in itial general position, the C om m ission is limiting itself to proposing  
to the Council the broad policy outline w hich should b e  presented b y  the C o m ­
munity in the G A T T  Textiles Com m ittee meeting in July. These proposals should  
b e  read in conjunction with a  report o n  the first three years of operation of  
M F A  I I I  an d  a  report o n  the situation in the C om m unity textile industry which  
are being transmitted to the Council separately.

- 2  -
T h e C om m ission points out that, in the co m in g  m onths the Council will have  
to consider the Com m ission's recom m endations for detailed directives, regard­
ing not only the renewal of the M F A  but also the bilateral textile agreements.
Before preparing its present Com m unication to the Council, the Com m ission h as  
carried out a n  exchange of views with the administrations of the M e m b e r States.
It h as also h a d  n um erous contacts with representatives of trade unions, industry,  
trade a n d  consum ers. In addition, the C om m ission h as h ad  informal talks with its  
major partners a m o n g  the importing an d  exporting countries.
1. Situation in the textile an d  clothing industry of the C om m unity
Although the n u m b er of jobs in the Com m unity's textile an d  clothing industry  
h a s  fallen b y almost tw o million during the last twenty years, the industry  
remains the m o s t important in the manufacturing sector. Approximately 2,650,000  
persons are em ployed in the industry (according to 1982 social statistics), /
a  figure w hich represents m o re  than 1 0 %  of the manufacturing workforce (26.1 m.).  
In terms of production the textile a n d  clothing industry accounts for about 6 %  
of the value added b y  the w hole of manufacturing industry.
Textile a n d  clothing production, w hich h a s  been subject to cyclical fluctuations,  
reached record levels in 1973, 1976 a n d  1979. However, in the last few years pro­
duction h a s  b een  in continuous decline an d  despite a n  appreciable recovery in  
1984 it s till rem ains below  1973 or 1980 levels. T h e differences between the two  
sectors, a s  regards their development in the period under review an d  their present  
state, c a n  b e seen  in detail in the report o n  the state of the industry. Over the  
s a m e  period consum ption h a s  remained virtually stagnant.
Prospects for production over the next few  years depend o n  the development of  
consum ption in the Com m unity, w h o s e  rate of increase is expected to remain low,  
an d  o n  the pressure of foreign competition. Import penetration in 1984 stood at  
45% , o n e of the highest penetration rates to b e  found a m o n g  the large industria­
lised countries.
The regulation of trade established b y the M F A  h as gradually raised confidence  
a n d  h as led to a  certain increase in investment and im provem ent of production  
technology during the last tw o years.

- 3  -
Meanwhile, productivity in the industry h a s  increased at a  rate w hich is  
faster than for all manufacturing industry.
Certain branches of the textile industry have already b eco m e very capital  
intensive but even if a  similar development is likely in the rest of the  
industry, it is not yet possible to say w h e n  this will occur. The clothing  
sector, especially, involves labour-intensive activity an d  remains parti­
cularly vulnerable to competition from countries with lower w a g e  rates.
In addition the majority of newly industrialised countries keep their markets  
virtually closed to imports of manufactured g oods which they themselves produce,  
while they continue to exert pressure o n  the traditional sectors; a  pressure  
w hich is intensified b y the exports of n e w  producer countries.
2. Developm ent of trade flows
Imports of textile an d  clothing products in the C om m unity have continued to  
develop, growing in volum e terms b y 4.7%  in 1983 a n d  7.9%  in 1984, a s  com pared  
with a n  average annual rate of 3,5%  under M F A  II (1979-1982). It should b e  
noted that the rate of growth of imports in 1984 w a s  substantially above the  
increase in consumption. This growth in imports is d u e to the increases in  
imports from  m o s t of the M F A  countries a s  well a s  from the countries with w hich  
the C o m m un ity h a s  preferential agreements. A s  regards the M F A  countries, imports  
(800,000 tonnes in 1984) increased b y 4 %  in 1983 a n d  10.5 %  in 1984, while imports  
from  preferential sources rose b y 10.3%  in 1983 a n d  12,2%  in 1984.
T h e  Com m unity's balance of trade in textile a n d  clothing products remains in  
deficit. In 1984, this deficit stood at 374,000 tonnes, in volum e terms, total  
extra-EEC imports am ounting to 1,729,000 tonnes. This balance h as in recent  
years b een affected b y s o m e  shifts in trade flows. T h u s between 1982 an d  1984  
the deficit with the low-cost exporting countries h as been widening, while  
the balance of textile a n d  clothing trade with industrialised countries h a s  
been in growing surplus since 1982, particularly with the United States.

-  4 -
T h e Latter tendency is the result .of the high value of the U S  dollar com bined  
with the recovery of the U S  econom y. T h e present favourable situation is,  
therefore, a  very precarious one.
There is cause for concern over the pressure exerted b y imports o n  the  
C o m m un ity market in 1984. This pressure could continue an d  could even intensify  
if certain industrialised countries adopt m o re  restrictive m easures which would  
divert exports from  low-cost countries towards the Com m unity.
3. T h e General Fram ew o rk of the Com m unity's Textile Policy
T h e C om m ission remains committed to the ultimate objective of liberalisation  
of textile trade policy. However, in the light of the above developments an d  
taking into account the current situation in the industry, the C om m ission  
considers that it is necessary to maintain for a  further period of time the  
broad lines of the policy defined in 1977 an d  confirmed in 1981, while  
introducing certain elements of flexibility. In the Commission's view, the  
efforts towards restructuring the industry have to b e  further intensified a n d  
the conditions permitting this have to b e  maintained for several m o re years.
The textile trade policy is, however, just o n e of the elements constituting  
a n  environment conducive to restructuring. It has to b e  com plem ented by a  
coherent internal policy aiming, in the first instance, at the development  
of a  genuine internal C om m unity market of a  size indispensable for the growth  
strategy of industry. Given this prospect, the C om m unity should gradually relax  
the present regional breakdow n of C om m unity quotas with a  view to its eventual  
elimination. This framework should also encourage industrial innovation, at  
national a n d  C om m unity level.
4. General Guidelines for the Com m unity's textile policy
The objectives of the M F A , a s  defined in Article 1, paragraph 2, are in  
essence the expansion a n d  liberalisation of trade, its orderly and equitable  
development while avoiding disruptive effects on the market.

-  5 -
T h e C om m ission considers that these objectives remain valid a n d  rec o m m en d s  
that the C om m unity confirm the importance it attaches to the above objectives,  
from the start of the forthcoming negotiations o n  the textile trade regime.
In the considered view of the Com m ission, a n  immediate return to G A T T  rules  
under present circumstances could lead to a n  unstable situation which w ould  
without doubt increase uncertainty for trade and could have adverse conse­
quences for the less developed exporting countries. In addition it could, if  
it leads to a  sharp a n d  substantial influx of imports from the "dominant"  
exporting countries, jeopardise the results of 10 years restructuring of the  
Com m unity's textile a n d  clothing industry.
Furthermore, o n  the international level, the protectionist pressure manifest  
in certain importing countries could grow  in strength in the absence of a n  
international framework such as the M F A , providing for negotiated solutions  
w hich d o  not affect the whole of international trade. Therefore, it is the  
Commission's view that, without losing sight of the ultimate objective of  
liberalisation of textile trade, a n  appropriate framework should b e maintained  
w hich will permit the gradual attainment of this objective.
However, in the Comm ission's opinion, the textile trade regime h as to b e  
adapted to take account of developments in the sector since the introduction  
of the M F A . It considers that the multilateral provisions agreed u p o n  should  
permit a  greater degree of flexib ility, particularly as regards the treatment  
of less developed exporting countries. T h e C om m unity should expect its other  
M F A  partners to follow a  similar approach. It should b e possible for all  
countries participating in international trade in textiles to m a k e  a  
contribution towards the liberalisation of the trading system  in accordance  
with their level of development a n d  their econom ic capabilities.

T h e  Elements of the Com m unity's position
In the Light of the above the Com m ission considers that the following  
guidelines should constitute the basis of the Com m unity's position w hich  
will,in the first instance, b e  presented at the forthcoming meeting of the  
G A T T  Textile Com m ittee in July 1985:
- A n  undertaking that the C o m m u n ity w ill, in a  spirit of cooperation,  
participate constructively in the discussions in order to reach  
agreement with all the countries taking part in international textiles  
trade o n  a  reasonable an d  equitable solution.
- A  reaffirmation of the Com m unity's com m itm ent to the ultimate objective  
of liberalisation of trade in textiles.
Recognition of the fact that the M F A  h as helped to attenuate the  
difficulties of the textile sector, b y facilitating the restructuring  
of the industry while allowing the orderly development of imports from  
M F A  countries, although difficulties persist in this sector.
T h e  n eed to maintain a  multilateral framework which permits the  
orderly development of textile trade, thus allowing the continuation  
of the restructuring effort an d  creating the necessary conditions for  
achieving liberalisation.
- T h e intention of the C o m m un ity to adapt the future trade regime in  
accordance with developments in the sector, an d  an  undertaking, through  
concrete measures, to apply in a  m o re flexible m anner the multilateral  
an d  bilateral provisions to b e  agreed, providing that in parallel an  
effort is m a d e  towards the opening of their markets b y  the otfier  
countries engaged in international textiles trade, to which each will  
contribute according to their level of development an d  their econom ic  
capabili ti es.
- T h e establishment of a  w ork program m e for the G A T T  Textile Com m ittee  
for the co m in g  twelve months, w hich would facilitate the fastest  
possible progress of the negotiations o n  a  concrete and realistic basis.
T h e  C om m ission proposes to the Council that it approve the above guidelines  
to b e  elaborated b y the C om m ission at the forthcoming G A T T  Textile Com m ittee  
meeting, in close collaboration with the 113 Textile Committee.