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DOCUMENTS "COM"
COM(77)21
Vol.1977/0008

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COMMISSION OFTHEEUROPEAN COMMUNITIES
COM(77)21 final
Brussels,11February1977
RECOMMENDATION FORACOUNCILREGULATION
concludinganAgreementbetweentheEuropeanEconomic
CommunityandSocialistFederalRepublicofYugoslavia
onTradeinTextiles
(submittedtotheCouncilbytheCommission)
C0M(77)21final

EXPLANATORY MEMORANDUM
1.Byadecision of1oDecember 1975 »theCouncil authorized the
Commission toopen negotiations with Yugoslavia for theconclusion
ofanAgreement oiltrade intextile products based ontheprovisions
ofArticle koftheArrangement onInternational Trade inTextiles .*
2.Inaccordance with theabove Council Decision and inconsultation
with theArticle 113Committee ,theCommission conducted negotiations
with theSocialist Federal Republic ofYugoslavia during themonths
ofMarch and June 1976 .
Following these negotiations adraft agreement wasdrawn up.The
Agreement which cover theperiod from 1.1.76 to31.12.77 makes provision
for ;
-voluntary restraint ,atagreed levels ,onexports tothe
Community ofcertain categories oftextile products in­
tended forconsumption within theCommunity ;
–the adoption ofasurveillance and consultation procedure
applicable tocertain categories ofproducts and permitting ,
inter alia ,the establishment onagreed terms ofvoluntary
restraint measures for the products inquestion ;
-the corresponding undertaking bytheCommunity tosuspend
the quantitative limitations atpresent inforce and not
toinvoke the safequard provisions oftheMultifibre
Arrangement for the categories ofproducts covered bythe
agreement solong astheagreed ceilings areobserved .
Moreover theAgreement does not apply toreimporte into
theCommunity ofarticles processed 6rtransformed in
Yugoslavia ,ofproducts temporarily exported from the
Community .
Theheads ofthedelegations found thedraft Agreement tobein
accordance with theresults ofthenegotiations and initialled the text
on25June 1976 .
3.Inorder toassure theachievement oftheobjectives oftheAgree­
ment ,thetwoparties have agreed that while awaiting thecompletion of
theprocedures necessary fortheconclusion oftheAgreement ,its

~2-
provisions beapplied defacto ,byboth sides ,asfrom July 1.1976 .
*f.The Commission considers that this draft agreement constitues
aresult that isacceptable tothe Community .Itproposes that the
Council conclude this Agreement byadopting the draft regulation
annexed hereto *
Themeasures necessary for theapplication bytheCommunity of
theprovisions oftheAgreement are thesubject ofaseparate Commission
proposal totheCouncil for aRegulation .

RECOMMENDATION FORAREGULATION OFTHECOUNCIL
concluding anAgreement between theEuropean Economic
Community andSocialist Federal Republic ofYugoslavia
onTrade inTextiles
THECOUNCIL OFTHEEUROPEAN COMMUNITIES ,
Having regard totheTreaty establishing theEuropean Economic
Community ,andinparticular Article 113thereof ,
Having regard totherecommendation from theCommission , '
Whereas theAgreement onTrade inTextiles negotiated between the
European Economic Community andtheSocialist Federal Republic of
Yugoslavia should beconcluded ,
HAS ADOPTED THIS REGULATION :
Article 1
TheAgreement between theEuropean Economic Community and the
Socialist Federal Republic ofYugoslavia onTrade inTextiles ,the
text ofwhich isgiven inthe Annex ,ishereby concluded onbehalf
ofthe Community .
Article 2
The President ofthe Council shall notify the other Contracting
Party oftheaccomplishment bytheCommunity ofthe procedures
required for the entry into force oftheAgreement .
Article 3
This Regulation shall enter into force onthethird dayfollowing
itspublication intheOfficial Journal oftheEuropean Communities .
Done atBrussels , For the Council ,
The President

AGREEMENT
BETWEENTHEEUROPEAN ECONOMIC COMMUNITY
AND
THESOCIALIST FEDERALREPUBLIC OPYUGOSLAVIA
ONTRADEINTEXTILES
(Textinitialledon25June1976)

TheCouncil oftheEuropean Communities ,
ofthe one part ,and
theGovernment oftheSocialist Federal Republic ofYugoslavia ,
oftheother part ,
Desiring toensure theorderly andequitable development oftrade in
textiles between theEuropean Economic Community ,hereinafter
referred toasthe "Community ",andYugoslavia ,andhaving regard
totheir respective levels ofdevelopment ;
Having regard totheprovisions oftheArrangement regarding International
Trade inTextiles (hereinafter referred toasthe"Geneva Arrangement ")
and inparticular Article 4thereof :
Have decided ,inaspirit ofmutual cooperation and inconformity
with the Geneva Arrangement ,toconclude this Agreement and
tothis endhave designated astheir Plenipotentiaries :
THE COUNCIL OFTHE EUROPEAN COMMUNITIES :
THE GOVERNMENT OFTHEJSOCIALIST FEDERAL REPUBLIC OFYUGOSLAVIA :
Whohave agreed asfollows :

Article 1
1.ThePartiesrecognizeandconfirmthat,subjecttothe
provisionsofthisAgreementandwithoutprejudicetotheir
rightsandobligations undertheGeneralAgreementonTariffs
andTrade,theconductoftheirmutualtradeintextilesshall
begovernedbytheprovisionsoftheGenevaArrangement.
2.ThisAgreementshallapplytotradeinthosecategoriesof
textileproducts,originatinginandcomingfromYugoslavia,
whicharelistedinAnnexesIandIItothisAgreement.
3.Yugoslaviashallestablishquantitative limitsonexports
totheCommunityinaccordancewiththeschedulesetoutin
AnnexI.
4.QuantitiesofthequotasharessetoutinAnnexInottaken
upbyaMemberStateoftheCommunitymaybereallocatedto
anotherMemberStatewithinthelimitsdecidedbytheCommunity
inaccordancewiththeproceduresinforceintheCommunity.
TheCommunityundertakestorespondwithinfourweeksofits
receipttoanyrequestmadebyYugoslaviaforsuchreallocation .
Itisundertstoodthatanyreallocation soeffectedwouldnot
needtobeconfinedwithinanylimitssetinprovisionsflexibility
established elsewhereinthisAgreement.

Article2
1.TheCommunityundertakes,inrespectofthecategoriesoftextile
productstowhichthisAgreementapplies,andsubjecttothe
satisfactory operationofthisAgreement,nottointroducenew
quantitative restrictions ,tosuspendimmediatelytheapplication
ofanyatpresentinforceandtorefrainfrominvokingthe
provisionsofArticle3oftheGenevaArrangement providedthat
exportstotheCommunityofsuchtextileproductsoriginatingin
andcomingfromYugoslavia donotexceedthequantitative limits
establishedundertheprovisionsofthisAgreement.
2.TheYugoslavauthorities undertaketotakeallappropriate
measurestoensurethattheagreedquantitative limitsarenot
exceeded.
3.TheCommunityshallnotobjecttotheabovequantitative
limitsbeingexceededintheeventofadditional demandonthe
Communitymarket,ontheunderstanding thattheadditional
quantitiesshallbefixedbycommonaccordofbothParties.

Article3
1.ImportsintotheCommunityoftextileproductstowhichthis
Agreementapplieswhichareforimmediatere-exportorfor
inwardprocessingandsubsequentre-exportoutsidetheCommunity
shallnotbesubjecttothequantitative limitsestablished
underthisAgreement,providedtheyareenteredassuchunder
anadministrative systemofcontrolinforceforthispurpose
withintheCommunity.
2.WhereCommunityauthoritiesascertainthatimportsreferred
toinparagraph 1abovehavebeenretainedforusewithinthe
Community,thelatterwillnotifytheGovernmentofYugoslavia
onaquarterlybasisoftheamountsinvolved.Yugoslaviashall
insuchcasesandattherequestoftheCommunitysetoffsuch
amountsagainstthequantitative limitorlimitsinquestionfor
thecurrentAgreementyearorforthefollowingyear.
3.Wheretheauthorities intheCommunityascertainunderan
administrative systemofcontrolinforcethatimportsof
textileproductscoveredbythisAgreementhavebeensetoff
againstquantitative limitsestablished underthisAgreement
buthavebeensubsequently re-exportedoutsidetheCommunity,
theauthorities concernedwillinformtheYugoslavauthorities
ofthequantitiesinvolvedandauthorizeimportsofequivalent
quantities ,whichshallnotbesetoffagainstthequantitative
limits\indertheAgreement.
4.Re-importsintotheCommunityoftextileproductstowhich
thisAgreementappliesandwhichhavebeentemporarily exported
bytheCommunityinaccordancewiththeproceduresinforcein
theCommunityandundergoneworkingorprocessinginYugoslavia
shallnotbesubjecttothequantitative limitsestablished
undertheAgreement.

Article4
1#BothPartiesagree "toenterpromptlyintoconsultations with
each,otherfattherequestofeitherandinconformitywiththe
provisionsoftheGenevaArrangement,onanymatterconcerningtheir
tradeintextilesandinparticularonanyproblemsarisingfromthisAgreement.Consultations heldunderthisArticleshallbe
approachedbybothPartiesinaspiritofcompromiseandwith
aviewtotheconciliation ofdifferencesexistingbetweenthera.
2.TheCommunitymay,wheneverimportsofproductsoriginating
inandcomingfromYugoslaviaandlistedinAnnexIIcausereal
risksofmarketdisruption (withinthemeaningofAnnexAtothe
GenevaArrangement),requestconsultations withYugoslaviawith
regardtotheseproductsinaccordancewiththeprocedurelaid
downinparagraph 5«
3.Ifitisascertained thatthereisanexcessiveconcentration
oftradeinaproductwithinacategoryforwhichquantitative
limitshavebeenestablished bytheCommunityundertheterms
ofthisAgreementorwhichisotherwisesubjecttotheprovisions
ofthisArticleandif,intheopinionoftheCommunity,thereis
ariskofsuchconcentration causingrealmarketdisruptionin
respectofthisproduct,theCommunitymayrequestconsultations
withYugoslaviaunderidenticalconditionstothosespecified
inparagraph 5below.
4.Therequestsforconsultations referredtoinparagraphs 2and3
aboveshallbefollowedwithinareasonableperiod(atthelatest
within21days)byareportontheconditionsontheCommunity
marketwhich,intheopinionoftheCommunity,justifysucharequest
Thisreportshallcontaininformation demonstrating theexistence
ofrealrisksofdisruptiontothismarket(withinthemeaning
ofAnnexAtotheGenevaArrangement).Theconsultation procedures
referredtointhisparagraphshallbeusedinmoderationandonly
intheeventofsubstantial changesinthelevelofexportsof
YugoslavproductstotheCommunityandshallbeappliedwithdue
regardfortheprinciplesandaimsoftheGenevaArrangement.

(Article4continued.)
5.pendingamutuallysa.tsifa.ctory conclusionoftheconsultations
providedforinparagraph2,Yugoslaviashalllimititsexports
oftheproductorproductsinquestiontotheCommunitytothe
higherofthefollowingtwolevels;
(i)onehundredandsevenpercent(107%)oftheexportsofthe
productorproductstotheCommunityduringthemostrecent
twelve-month periodprecedingthemonthinwhichtherequest
forconsultations wasmadeforwhichstatistics areavailable
forthetwoParties;or
(ii)theaverageannualexportsoftheproductorproductsfrom
YugoslaviatotheCommunityforanythree-yearperiodwithin
thesixyearsprecedingthemonthinwhichtherequestfor
consultations wasraa.deforwhichstatistics areavailable
forthetwoParties,
o„TheCommunityshallauthorizetheimportationofgoodsdispatched
fromYugoslaviabeforethedateonwhichtherequestforconsultations
wasmade.Moreover,theCommunityshallexamineattentively and
giveitsfavourableconsideration toarrangements forgoodsforwhich
exportlicenceshavebeenissuedonthebasisofbonafidecontracts
andlettersofcredit.IftheYugoslavauthorities considerthatthe
application oftheseprovisionsgivesrisetoproblemswhichdamage
thetradeinterestsinquestion,Yugoslavia mayrequestconsultations
withtheCommunityinaccordancewithparagraph2above.
7.Consultations shallbeheldattherequestofYugoslaviainorder
toreviewtheneedforthemaintenance ,modification orabolition
ofanyquantitative limitsestablishedunderthisArticle,whenever
themarketconditions whichledtotheestablishment ofsuchlimits
nolongerprevail.
8.IntheeventofthePartiesbeingunabletoreachagreementin
theconsultations providedforinthisArticle,eitherofthemmay,
asasignatorytotheGenevaArrangement ,referthemattertothe
TextilesSurveillance BodyinaccordancewithArticle11ofthe
GenevaArrangement .EitherPartychoosingsuchacourseofaction
shallimmediatelynotifytheotherofitsintention.

Article 5
1.Portions ofanyquantitative limit established under this Agreement
which arenotused during anyAgreement year maybecarried over and
added tothecorresponding quantitative limits forthefollowing year ,
within alimit of10%ofthelatter .
2.Within alimit of10%ofeach quantitative limit established under
this Agreement ,advance deliveries shall beauthorized from the
corresponding quantitative limit inforce forthefollowing Agreement
year .Amount sdispatched inadvance shall bededucted from the
quantitative limits fortheproducts inquestion forthefollowing year .
3.Within any oneAgreement year ,unused portions ofquantitative limits
established under this Agreement may betransferred toanother
quantitative limit under theconditions setoutbelow :
(i)tocategory 55*09 (other woven fabrics ofcotton )and ,therein ,
tosubcategory ex55*09 (cotton fabrics ,other than unbleached
orbleached )from category ex62.02 (bedlinen ,table linen ,
toilet linen andkitchen linen ;curtains and other furnishing
articles ofcotton except netcurtains ),provided that such
transfers donotexceed 10%ofthequantitative limit towhich
they aremade ;
(ii)tocategory ex62.02 (bedlinen ,table linen ,toilet linen and
kitchen linen ;curtains andother furnishing articles ofcotton
except netcurtains )from category 55*09 (other woven fabrics of
cotton ),provided that such transfers donotexceed 7%ofthe
quantitative limit towhich they aremade ;
(iii)within category 55*09 (other woven fabrics ofcotton ),to
subcategory ex55*09 (cotton fabrics ,other than unbleached or
bleached ),provided that such transfers donotexceed 7%ofthe
quantitative limit forthesubcategory towhich they aremade .

(Article5continued.)
4.Theflexibilityprovisionssetoutinparagraphs 1,2and.3
mustnot,inanygivenAgreementyear,resultinthequantitative
limitforanycategorybeingexceeded ,bymorethan15%ofthe
quantitative limitforthatcategoryforthatAgreementyear.
5.Theflexibilityprovisionssetoutinparagraphs 1,2and.3may
beappliedbyYugoslaviaonlyfollowingwrittennotification tothe
CommunitybytheYugoslavauthorities .

-9-
Article6
Yugoslaviashallmakeeveryendeavourtoensurethai;exportsofall
textileproductsforwhichquantitative limitsmay"beestablished under
thisAgreementarespacedoutasevenlyaspossibleovereachAgreement
year,dueaccount "beingtaken,inparticular,ofseasonalfactors.

-10-
Article7
The"twoPartiesagreetoexchangeallrelevantinformation concerning
theirmutualtradeintextilesinordertoensurethesmoothfunctioning
ofthisAgreement.

Article8
1.ThePartiesagree"thatthequantitative limitsestablished underthis
Agreementshall"bemanagedunderasystemofdoublecontrol,thedetails
ofwhicharesetoutinAnnexIII.
2.YugoslaviathereforeundertakestofurnishtheCommunitywithprecise
statisticalinformation ,onaquarterly "basis,onallexportlicencesissued
"bytheYugoslavauthoritiesforallcategoriesoftextileexportstothe
Communitycovered "bythisAgreement.
3.TheCommunityshalllikewiseforwardtotheYugoslavauthorities ona
quarterly "basisprecisestatisticalinformation onimportsofsuchproducts
intotheCommunity.

-12-
Article9
1.BothPartiesshalltakeallappropriate measurestoensurethatthe
traditional tradeflowsandcommercialpracticesaremaintained "between
theCommunityandYugoslavia.
2.ShouldeitherPartyinformtheotherthatthefunctioning ofthis
Agreementhasgivenrisetodifficulties regardingthemaintenance of
existingcommercialrelations "betweenimportersintheCommunityand
theirsuppliersinYugoslavia ,thePartiesagreetoconsulttogetherin
accordancewiththeproceduressetoutinArticle4(l)above.

Article10
WithoutprejudicetotheotherprovisionsofthisAgreement,Yugoslavia
agreesthatthequantitative restrictions onimportsintoIrelandofthe
followingtextileproductsfromYugoslavia maybemaintaineduntil
30June1977atthelatest.
BTN55.05
55.06
55.07Cottonyarn,notputupforretailsale
Cottonyarn,putupforretailsale
Cottongauze.

-14-
Article11
ThisAgreementshallapplytotheterritories wheretheTreatyestablishing
theEuropeanEconomicCommunityapplies,ontheconditionslaiddownin
thatTreaty,andtotheterritoryofYugoslavia.

-15-
■Article12
1.ThisAgreementshallenterintoforceonthefirstdayofthemonth
followingthedateonwhichthePartieshavenotifiedeachotherofthe
completionoftheproceduresnecessaryforthatpurpose.Itshallremain
applicableuntil31December1977*
2.ThisAgreementshallenterintoforceon1January1976.
3.EitherPartymayatanytimeproposemodifications tothisAgreement
ordenounceitprovidedthatnoticeisgivenatleast120daysbeforethe
expiryofanytwelve-month period;inthelattereventtheAgreementwill
cometoanendattheexpiryofthesaidtwelve-month period.
4.TheAnnexesandProtocolstothisAgreementshallformanintegral
partthereof.

-16-
Article13
ThisAgreementshalltoedrawnupin"twocopiesintheDanish,Dutch,
English,French,German,ItalianandSerbo-Croat languages,eachof
thesetexts"beingequallyauthentic.

Annex I
Products
mrespect ofwhich Yugoslavia will exercise
voluntary restraint vis-a-vistheCommunity as
awhole from theentry into force oftheAgreement
TheCommunity hereby informs Yugoslavia that thequantitative limits
forthetextile products listed below will "beallocated between the
Member States asfollows ;
r~– Quantitative limits |
Icommunn,,Γ»,,–4 -Nimex !
<"»S* «S4--1AM IMember I (metric tons )
IUUfciUUU1BTariffTariff NoCode 1 State1976 1977
55.09 01to Otherwoven fabrics IFRG 2774 3097
98 ofcotton F 863 1012
I 6443 6475
BUL 1264 1367
UK! 525 675
IRL 10 15
DK 900 905
EEC 12779 13546
Iofwhich
ex55.09 Cotton fabrics ,other FRG 459 ! 497
than unbleached or Ρ 94 116
bleached I 372 374
BNL 238 244
UK 21 31
IRL 4 5
DK 237 238
EEC 1425 1505
ex62.02 B11,41,Bed linen ,table FRG 276 299
43,47,linen ,toilet linen F 175 189
71,73, !and kitchen linen : I 186 193
81 curtains and other BEL 190 191
furnishing articles UK 21 31
ofcotton except net IRL 5 6
Icurtains DK 99 100
EEC 952 1009

-18-
AnnexII
Productssubjecttothespecialconsultation procedureprovidedforin
Article4
CommonCustoms
TariffWoDescription
55.05 Cottonyarn,notputupforretailsale
56.07 Wovenfabricsofman-madefibres(discontinuous orwaste)
ex60.03Men'ssocks j
60.04 Undergarments,knittedorcrocheted,notelasticnor
rubberized
60.05AKnittedorcrochetedoutergarments
61.01 Men'sandboys*outergarments
61.02 Women's,girls'andinfants'outergarments
61.03 Men'sandboys'undergarments,includingcollars,
shirtfrontsandcuffs
ex62.02 Bedlinen,tablelinen,toiletlinenandkitchenlinen;
curtainsandotherfurnishingarticles(otherthanthe
productslistedundersubheadingex62.02BinAnnexi)

-19-
AnnexIII
Asagreedbetween "thePartiesinArticle8of"theAgreement,theadministration
oftextileimportsfromYugoslaviawill"be"basedonasystemofdouble
control.Thedetailsofthissystemhave"beenagreedbetweentheParties
andaresetout"below.
TheauthoritiesintheCommunitywill,automatically andwithoutdelay,
acceptimportsoftextileproductsonsubmissionoftheimporter's
applicationtogetherwiththeoriginalescortlicenceissued "bytheYugoslav
authorities.TheauthoritiesintheCommunitywillbeentitledtorequest
thepresentation ofanexportlicenceinrespectofgoodsoriginatingin
Yugoslaviaofthecategories showninAnnexIand,whereArticle4hasbeen
invoked,inAnnexII.TheseexportlicenceswillbeissuedbytheYugoslav
Governmentauthorities uptothetotalamountoftheagreedquantitative
limits.
Theexportlicencemustspecify:
1.destination
2.sériainumber
3.importer'snameandaddress
4.exporter'snameandaddress
5.netweight(inmetrictons)andvalue
6.categoryandclassification ofproduct
7.certificateissuedbytheYugoslavauthorities showingthatthe
quantityhasbeendebitedagainsttheagreedceilingforexportsto
theCommunityor,whereappropriate,isforimmediatere-exportor
forprocessingandsubsequentre–exportoutsidetheCommunity.
TheauthoritiesintheCommunitywillnotraisedifficultiesintheevent
ofadiscrepancybetweentheweightindicatedontheexportlicenceand
theshipmentorimportweightprovideditiswithinreasonablelimits,
whiletheYugoslavauthorities,fortheirpart,willendeavourtokeepany
discrepancies toaminimum.

20-
AnnexIII(contd.)
Intheeventoftotalorpartialwithdrawalofanexportlicence,the
YugoslavauthoritieswillnotifytherelevantauthoritiesintheCommunity
ofsuchtotalorpartialwithdrawal.TheauthoritiesintheCommunity
willtaketheappropriate measuresinaccordancewiththeirexisting
administrative provisions.
TheYugoslavauthoritieswillforwardtotheauthoritiesintheCommunity,
viatheEmbassiesoftheMemberStatesoftheCommunityanddirectlyto
theCommission,quarterlyreturnsshowingthetotalnetweightinmetric
tonscoveredbytheexportlicencesissuedagainsttheceilingsforexports
totheCommunity,aswellastheallocationoftheselicencesamongthe
MemberStatesoftheCommunityforeachcategoryoftextileexportstothe
Communitysubjecttoaquantitative limitunderthisAgreement.

COMMISSION
OPTHE
EUROPEANCOMMUMTIES
Directorate-General
orExternalRelations-21-
AnnexIV
Sir,
Inconcludingthenegotiations heldbetweentheCommunityandthe
GovernmentofYugoslavia whichhaveledthisdaytothesigningofan
Agreementregardingtradeintextileproducts,theCommunityhasthe
honourtoinformyouofthefollowing:
AsstatedinArticle3(4)»"theAgreementdoesnotapplytore-importsfrom
Yugoslaviaoftextilearticlesproduced "bytheworkingorprocessingof
productstemporarily exportedfromtheCommunity.
TheCommunityrecognizestheeconomicimportanceofsuchworkingand
processingoperationsforYugoslavia.Vfhilereserving,therefore,the
righttoadoptunilateralmeasurestoregulatethistrade,"bysubjecting
ittoauthorization ,theCommunitywillendeavourtomaintainsuchtrade
channelsasexistunderthecurrentarrangements .
Ishouldhegratefulforyourconfirmation ofyourGovernments agreement
withtheabove. n
Pleaseaccept,Sir.theassuranceofmyhighestconsideration .
;