ARCHIVES HISTORIQUES
DELACOMMISSION
COLLECTION RELIEE DES
DOCUMENTS "COM"
COM (74)341
Vol.1974/0060

Disclaimer
Conformément aurèglement (CEE, Euratom) n°354/83 duConseil du1erfévrier 1983
concernant l'ouverture aupublic desarchives historiques delaCommunauté économique
européenne etdelaCommunauté européenne del'énergie atomique (JOL43du15.2.1983,
p.1),telquemodifié par lerèglement (CE, Euratom) n°1700/2003 du22septembre 2003
(JOL243du27.9.2003, p.1),cedossier estouvert aupublic. Lecaséchéant, lesdocuments
classifiés présents dans cedossier ontétédéclassifiés conformément àl'article 5dudit
règlement.
Inaccordance with Council Regulation (EEC, Euratom) No354/83 of1February 1983
concerning theopening tothepublic ofthehistorical archives oftheEuropean Economic
Community andtheEuropean Atomic Energy Community (OJL43,15.2.1983, p.1),as
amended byRegulation (EC, Euratom) No1700/2003 of22September 2003 (OJL243,
27.9.2003, p.1),this fileisopen tothepublic. Where necessary, classified documents inthis
filehave been declassified inconformity with Article 5oftheaforementioned regulation.
InÜbereinstimmung mitderVerordnung (EWG, Euratom) Nr.354/83 desRates vom 1.
Februar 1983 über die Freigabe der historischen Archive der Europäischen
Wirtschaftsgemeinschaft undderEuropäischen Atomgemeinschaft (ABI. L43vom 15.2.1983,
S.1),geändert durch dieVerordnung (EG, Euratom) Nr.1700/2003 vom 22.September 2003
(ABI. L243vom 27.9.2003, S.1),istdiese Datei derÖffentlichkeit zugänglich. Soweit
erforderlich, wurden dieVerschlusssachen indieser Datei inÜbereinstimmung mitArtikel 5
dergenannten Verordnung freigegeben.

COMMISSION OFTHEEUROPEAN COMMUNITIES
COM(74)341final
Brussels,27March1974
RECOMMENDATION FORADECISION(ESC)OFTHECOUNCIL
authorizingtheCommissiontoopennegotiations with
certainthirdcountriesfortheconclusion of
agreements ontradeintextiles
(submittedtotheCounoil "bytheCommission)
COM(74)341final

EXPLAMTORY STATEMENT
1.TheArrangement regarding International Trade inTextiles (MFA )
which wasnegotiated within theframework oftheGeneral Agreement on
Tariffs andTrade provides ,initsArticle 4»that .participating importing
andexporting countries mayconclude bilateral agreements onmutually
acceptable terms .
2.Within theframework oftheLong Term Arrangement onCotton Textiles
(LTA)which expired on31.12.73 .»theCommunity hadentered into bilateral
agreements withtheprincipal exporting countries (India ,Pakistan ,Japan ,
Hong Kong ,South Korea andEgypt ),inorder toensure theorderly develop­
ment oftrade incotton textiles .These agreements committed theCommunity ,
inparticular ,torefrain from establishing newquantitative import
restrictions (andtosuspend those which were still inforce )oncondition
that the exporting country did not exceed theagreed self-restraint levels
for itsexports totheCommunity ofproducts covered bytheagreement .
Theprovisions ofthese agreements ,which expired either on30September
1973 or31December 1973 »have been kept inforce onadefacto basis
bytheCommunity until 30June 1974 »ontheunderstanding that theexporting
countries concerned also take similar measures .
Furthermore ,theCommunity hasconcluded anagreement ontrade in
cotton products with Yugoslavia which wasnotaparty totheLTA .This
agreement which still remains inforce until 31December 1974 constitutes
theengagement analogous totheLTAaccepted byYugoslavia sothat it
might benefit from tariff preferences fortheproducts inquestion (2).
(1)Aoregards I-Iacco ,close andregular contact wasestablished with the
relevant authorities sothat theevolution oftextile exports from this
territory could befollowed ,,
(2)When making itsoffer ongeneralised tariff preferences ,theCommunity
considered that forcotton anddirectly substitutable products ,tariff
preferences would begranted tocountries which were parties totheLTA
ortothose which were notparties totheLTAbutwhich hadaccepted an
obligation analogous tothat provided bytheLTA0
./•

Onseveral occasions and .especially after theconclusion ofthe
GATT negotiations inGeneva forthenewArrangement regarding International
Trade inTextiles (MFA),most ofthethird countries concerned sought ,
expressly orthrough informal contacts with theservices oftheCommission ,
theopening ofnegotiations with theCommunity fortheconclusion of
newagreements .Thecountries inquestion consider these agreements
to "beinstruments which would enable them toensure theexpansion and
development oftheir textiles trade .Moreover these agreements very ofton
constitute ameans whereby imports from allexporting countries mayhe
equitably balanced .
Referring only tothose countries with which theCommunity had
concluded "cotton "agreements (l),itmust benoted that Japan ,South
Korea ,Hong Kong andYugoslavia inaddition tobeing exporters ofcotton
products arealso important exporters ofartificial ,synthetic andwoollen
textiles .Forcertain ofthese products ,allofwhich arecovered bythe
newmultilateral Arrangement ,itisundeniable that exports tothe
Community have ,during recent years ,increased toasubstantial extent .
Itshould berecalled that the "unsatisfactory situation "inworld trade
intextile products ,which isreferred tointhePreamble ofthemulti -
fibres Arrangement ,hasbeen themajor factor leading totheconclusion
ofthepresent Arrangement .
(l)Taiwan also figures amongst these countries .Although this isone
ofthemost important suppliers inthetextiles sector ofboth cotton
andsynthetic products ,theCommission ,which does notenvisage
negotiations with Taiwan will draw upappropriate dispositions inthe
near future .

3-
3.TheArrangement provides fortheconclusion ofbilateral agreements
inorder toeliminate real risks ofmarket disruption inimporting coun­
tries (l).Inthis connection theCommission considers that theopening
ofnegotiations with India ,Pakistan ,Japan ,Hong Kong ,South Korea ,
Egypt andYugoslavia isboth justified andnecessary .Taking into account
thewishes expressed bycertain ofthecountries inquestion ,itseems
appropriate that theCommunity attempts toconclude bilateral agreements
with these countries within the time limit fixed inArticle 2ofthe HPA
andalso before theexpiry oftheprovisions bywhich those agreements which hae
I;
already expired were maintained inforce onadefacto basis till 30June 1974 *
Such agreements seem indiopensable inorder toensure thestability ofthe
Community textiles market with regard toexports from countries which are
particularly competitive ,tofacilitate theprocess ofliberalization of
trade inthis sector byanorderly development ofexports andtomaintain
existing trade patterns .
However ,ifanexamination indepth ,which istobeconducted atthe
same time ,establishes that imports from other exporting countries consti­
tute areal risk ofmarket disruption intheCommunity orif3uch imports
hamper theprocess ofliberalization agreed tobytheCommunity together
with theother parties totheArrangement ,theelimination oflestrictions
onproducts from these countries might also beachieved bytheinclusion
oftheproducts inquestion inbilateral agreements negotiated inconfor­
mity with Article 4of "theArrangement asprovided forinitsArticle
2(3)(ii)«TheCommission reserves theright tosubmit such appropriate
proposals totheCouncil asmayprove necessary ,,
(1)Inthis sense itshould berecalled that Article 2oftheArrangement
provides ,initsparagraph 4»that participating countries ,!shall
afford full opportunity forbilateral consultation andnegotiation
aimed atmutually acceptable solutions inaccordance with Articles 3
and4oftheArrangement .11
(2)Theagreement which isinforce with Yugoslavia expires on31«12-.>1974 »
/.

4.Theagreements tobenegotiated should bebased essentially onthe
principle oftheautolimitation ofexports bythecountries inquestion .
Products covered bythese agreements should bedetermined ,taking into
account theconcept of"selectivity "contained intheArrangement ,ona
case bycase basis ,having regard especially tothevolume ofimports
andtheir evolution during thereference years andtothe .inter changeabi­
lity offibres .Certain ofthese exporting countries areonly concerned ,
atthepresent time ,with cotton textiles .
Inconformity with Article 4of "theMFA ,these agreements must
contain provisions which facilitate theexport infull ofthelevels
provided forunder such agreements .They should also contain provision
forgrowth rates ,carry-over ,carry-forward andflexibility .The
Arrangement alBO provides that theproblem ofdeveloping countries should
betaken into consideration .
Finally ,itisappropriate torecall that theapplication ofthese
newagreements should ensure management bytheCommunity oftheagreed
autolimitation levels and should facilitate their full utilization .
Inthis connection theCommission ,initsmemorandum totheCouncil
of7«H O1973 (l)»setting outguidelines fortheestablishment of .acommon
import regime fortextiles hadenvisaged amongst other things ,
-theopening orprogressive enlargement ofaCommunity reserve ;
-theprogressive enlargment ofthequotas ofthose Member States which
bear thelightest burden ;
-increased flexibility between Member Stated quotas . .
(l)Doc.S/1213/73(COMER 225)

-5-
5.Inconclusion,theCommissionconsidersthatthenegotiations m
question(l)shouldbeopenedassoonaspossible.Tothisendit
considersthatthenegotiatingdirectiveswhichtheCouncilmaylaydown,
should "beestablishedtakingdueaccountofthediversitybetweencountries
orgroupsofcountriesforwhichnegotiations areenvisagedandthe
differentproblemswhichmayarisewithregardtooneorotherofthese
groupsofcountries.
Itwouldbeappropriatealsothat,atleastatthisstage,these
directivesbelaiddownwithsufficientflexibility sothattheymay
provideacommondenominatorforthewholeofthenegotiations .
Oncetheopeningofthenegotiations ha3beenauthoriseditwould
beappropriate ^inconsultation withthespecialArticle113Committee
whichassiststheCommissionduringnegotiations ,tosettlethequestion
ofquantitieswhichareessentialtothediscussionoftheparticularcase
ofeachofthethirdcountriesconcerned.
6.TheCommissionthereforerecommendsthattheCouncil,byvirtueof
Article113oftheTreaty,takestheDecisionannexedhereto.
1
(l)WithIndia,Pakistan,Japan,HongKong,SouthKorea,Egyptand
Yugoslavia e

RECOMMENDATION FORADECISION(EEC)OPTH3COUNCIL
authorisingtheCommissiontoopennegotiations with
certainthirdcountriesfortheconclusionofagreements
ontradeintextiles
THECOUNCILOFTHEEUROPEANCOMMUNITIES ,
HavingregardtotheTreatyestablishing theEuropeanEconomicCommunity
andinparticularArticle113thereof$
Havingregardtotherecommendation fromtheCommission ;
WhereastheArrangementregardingInternational TradeinTextilesprovides,
initsArticle4jthatimportingandexportingcountriesmayconclude
mutuallyacceptablebilateralagreements !
WhereastheCommunityhadconcludedbilateralagreementswithIndia,
Pakistan,Japan,HongKong,SouthKoreaandEgyptwithintheframeworkof
theLongTermArrangement onTradeinCottonTextiles,
WhereastheCommunityhadsimilarlyconcludedabilateralagreementon
cottonproductswithYugoslavia,whichwasnotapartytotheLongTerra »
Arrangement onTradeinCottonTextiles;
Whereasthethirdcountriesmentionedabovearethemostimportantsuppliers
totheCommunityinthetextilesector;
Whereas,inordertofacilitatetheprocessofliberalization oftradein
thetextilesectorbyanorderlydevelopmentofexports,permittingatthe
sametimetheachievementofanappropriate degreeofprotectionforthe
Communitymarket,negotiations shouldbeopenedwiththesecountriesfor
theconclusionofbilateralagreementsontradeintextiles }

DECIDE0
Article1
TheGuMimssionisauthorisedtoopennegotiations withSouthKorea,
HongKong,India,Japan,Pakistan,EgyptandYugoslaviafortheconclusion
ofbilateralagreementsontradeintextiles,inconformitywiththe
provisionsoftheArrangementregardingInternational TradeinTextiles.
Article2
TheCommissionshallconductthesenegotiations inconsultation with
thespecialcommitteeappointedunderArticle113andonthebasisofthe
directiv®annexedhereto*
DoneatBrussels, FortheCouncil
ThePresident

ANNEX
NTSGOTIATIKG DIRECTIVES
a)NatureoftheAgreements:
Autolimitation a-greementsinconformitywith,theprovisionsofthe
multilateral ArrangementregardingInternational TradeinTextilesthe
durationofwhichshall "beequivalenttothatofthemultifibres
Arrangement.
b)Countrieswithwhichnegotiationsshallbeopened:
Countrieswhichhadconcludedbilateralagreements ontradeincotton
textileswiththeCommunityandwhichhaveacceptedthemultilateral
ArrangementregardingInternational TradeinTextiles.
c)Productscoveredbytheagreements:
Ontheonehand,categoriesofproductsand,ontheotherhand,specific
products,theinclusionofwhichaccordingtotheirorigintobe
justifiedunderArticle4ofthemultifibres Arrangement .
Inordertoavoidthecircumvention oftheprovisionsoftheagreements
bychangesinthemixturesoffibres,itwillbenecessarytoinserta
clausesimilartoArticle8ofthe"cotton"agreementbetweenthe
CommunityandYugoslavia,
Aclauseallowingceilingstobefixedwithincategoriesofproducts
containedintheagreementsincasesv:hereanabnormalconcentration on
certainproductswasestablished.
d)Autolimitation ceilingsandprovisionsrelatingthereto:
Ceilingstobefixedonthebasisofthelatestavailablereferenceyear
withcoefficientofgrowth.
Appropriateprovisionsfortransferbetweenceiling^forcarry-overfrom
oneyea.rtothenextofunusedquantitiesandforcarry–forwardtothe
followingyear.
Managementofceilingsaccordingtothedoublecontrolsystem.