ARCHIVESHISTORIQUES
DELACOMMISSION
COLLECTION RELIEEDES
DOCUMENTS "COM"
COM(76)720
Vol.1976/0218

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COMMISSION OPTHEEUROPEAN COMMUNITIES
COM(76)720final
Brussels,^January1977.
Communication fromtheCommission tothe
Councilconcerningthecommercial
policyoftheCommunityfor
textilesproducts
and
ProposalforaCouncilDecisionauthorising the
Commissiontonegotiatetherenewalof
theArrangementregardingInternational
TradeinTextiles
C0I.H7-)720final.

Co :– ;.-iiriticr fro-the Co-.r.irsior .tothe
ccn~crr.ir.,~ th<>Co-.^uni ty*scor-crcial policy fortextiles prod-jets
fter.gva Iofthe /'.rra.rr r-~cnt rn,7.r!inr Intcrr atior.al 7rc .?einTextiles
1.TheTextile ^Committee established under theArrangeaent regarding
International Tirade inTextiles (KFA)agreed atitslast meeting
(30November -10December *1976 )tomeet towards theendofFebruary next
inorder totake stock ofthesituation asregards
therenewal ofi;hoKFA which expires on31.12.1277 * TheCommunity
hasaresponsibility toensure that this framework within which
theactivities ofallinterested parties inthetextiles andclothing sectors
(commerce ,trade andindustry )will "beexercised after 1.1.1978 ,isdetermined
assoon aspossible . ,
Theneed tosettle this natter 1nthe"early months of1977 cannot ,
therefore ,betoostrongly emphasized .'
?.Xany participating countries ,including theUnited States ,have
already made itclear that they wish theArrangement toberenewed
without change . TheCommunity ,ontheother hand ,has stated in
Geneva that ,whLlst itfavours renewal offramework arrangements for
international cooperation ontrade intextiles ,such renewal does not
cerely mean anextension ofthetine during which thepresent Arrangenent
will bevalid . TheCommunity favours .a negotiation
fortherenewal pftheArrar.gcacnt,in thecourse ofwhich consideration should
begiven topossible means ofeffecting improvements ,taking into account
theexperience gained over thelast threo years .
3,Since theComaunity'3 acceptance oftheXFA ,itscomaercial policy
towards parties totheArrangeaent hasbeen &3follows :
–thirteen bilateral agreements have been negotiated bytheComaunity
under Article 4oftheKFA with themain supplying countries .
These agreements provide ,ingeneral ,forexport restraint oncertain
selected products andspecial consultation procedures ;
–theCommunity hasapplied ,onseveral occasions ,theprovisions of
thesafeguard procedure inArticle 3ofthoMFA ;
Prazil ,Colombia ,Egypt ,India ,Korea ,Hong Kong ,Kacac ^Malaysia ,Singapore ,
Pakistan ,Rom^mia ,J-jOwlavia ,Japan .

theCommunityha8undertakentocompleteitsprogrammeforthe
eliminationofquantitativerestrictions otherthanthosedealt
withbymea^sofbilateralagreements t>y31•3*1977atthelatest.
4»TheCommunity'sparticipation intheKFAhasnot,however,
preventeditsipportsoftextilesproductsfroaincreasingdramatically
overthepasttjtireeyears,especiallyintheclothingsector.This
wasnodoubtduie,atleastinpart,tothedelayinvolvedir.the
conclusionoftjnebilateralexportrestraintagreementswiththe
Cczaunity'sprincipalsuppliers,referredtoabove.Nevertheless,the
agreementsnowinplacehavealreadycontributedtowards,andwillin-?
creasinglybringabout,astabilisation oftradefromthe-Community's
principalsuppliers.
5.Therecanbonodoubt,intheCoamiscion'sview,thattheCommunity's
expectations inacceptingtheArrangement asaframeworkfortradein
textilesin197^havenotbeenfullyrealisedinpractice.Thewayin
whichtheTtTAh^.sbeeninterpretedduringitsfirstthreeyears r*
hasbeenfarfrcasatisfactoryfroathoCommunity'spointofviewandhas
har.pereditsimplementation oftheArrangement.
Theparticulardifficulties encounteredbytheCoaaunityarereflectedin
thetermsofth^idirettivesannexedhereto,whichtheCommissionproposes
shouldbefollowedinnegotiatingtherenewaloftheArrangement.
6.TheCommissionisoftheopinionthatanegotiationsuccessfully
pursuedonthebasi3ofthosedirectiveswillensurethatthe"renewed
Arrangementfunctionsmoroequitablyforimportingandexportingcoun­
triesandwillbettercontributetotheprogressiveadaptationofindustry
underconditionsofworldcompetition.Inaddition,asismadeclearin
theannexeddirectives sucharenewedKFAwillalsoservetheinterests
oftheleast-developed andleast-competitive "exportingcountries.
TheCommissionfeelsthatthislatterelementstrengthenstheCommunity*©
negotiatingpositionundshouldnotbooverlooked.

7.reforc concluding thi3 communication ,theCommission also wickcs
todraw attention tothe fact that thematters referred toabove which
deal solely with theimmediate question ofthe MFA'srenewat ,.
contribute only part oftheCommunity 'scorrmercial policy inthis
sector . Imports oftextiles products from nor.-J'FA countries or
from countries with which theCommunity hasspecial relations occupy ,
inccme cases andforcertain products ,amajor .andgrowing portion
oftheCommunity market . With regard tothese countries ,theY - '
Community has allitsdisposal other autonomous oragreed safeguards
instruments such astheautonomous regime vis-a-vistheState-trading
countries ,andtheprovisions oftheAssociation agreements ,agreements
with theMediterranean countries ,theLome Convention andtheagreements
with theEFTA countries .Theprovisions oftheMFAmust therefore "be
placed inamore general framework ofcommercial policy fortheproducts
inquestion .
8.Furthermore ,itshould benoted that effective implementation of
thecordon commercial policy inthis sector cannot "beachieved
without aconstant crupply ofrecent andcomplete statistics ontrade
andproduction oftextiles products . Such information will be
crucial ,forexample ,tothesuccess orfailuro ofrenegotiating the
Community 'spresent bilateral restraint agreements ,which allexpire
atthe endof1277 * AllMember States should
contribute this information systematically inthemanner described in
document CUD/969/76. TheCommission intends topropose theextension
oftheprogram :,econtained inthi3 document ,tomeet future needs .
9»InITovember1973»theCommission sent totheCouncil ,forit3
approval ,amemorandum setting outcertain guidelines forestablishing
acommon import regime fortextiles products .Thi3 memorandum drew
attention tothefact that theburden oftextiles imports from third
countries wasvery unevenly shared amongst Member States .Itproposed
that appropriate measures betaken toreduce gradually thedisparities
inthedistribution 'ofimports inthedifferent regions oftheCommunity
inorder toensure thatthesinglemarketisfullyestablished over a
periodofadjustrment.

-4-
Inorder -toachieve this goal ,further andmore substantial progress
should "bemade within this system throughout theduration ofarenewed K?A .
10.Onthese ,andallother matters which have todowith Community
policies inthetextiles sector ,theCommission reserves itsright
tosubmit proposals totheCouncil induecourse *
*
t
* *
■11.Talcing into account theforegoing ,theCommission recommends thai ,
theCouncil adopt theDecision annexed hereto .
/

DIRECTIVES FORNEGOTIATIONS
Thetain objective fortheConmunity iatonegotiate therenewal
oftheTTAasrapidly aapossible andinsuch awayastoenable
theCocnunity ,whilst respecting thebasic objectives setoutin
thepreacble andArticle 1ofthepresent Arrangement ,toachieve
the results set out below .
1.Ensure that therelative penetration oficport carkets ,the
evolution ofdar.eatic consumption and the cumulative effects of
Imports arerecognised ,also taking into account theregional and""
social aspects asbeing among thefactors justifying recraests for
consultations andnegotiations insituations ofmarket disruption (or
real risk thereof )asdefined intheArrangement ,andinaddition ,ensure
that these factors mayvalidly betaken intoaccount infixing inthe ;
exceptional cases referred tointhesecond sentence ofAnnex B(2),agrowth
rate lower than vfo.
Totheextent i;hat theCoimmnity obtains satisfaction onthis and
other issues referred tobe!low (theCommunity would propose an
increase inthoannual growth rate contained inthefirst sentence
ofAnnex B(2)from to7'A
2.Taking into account theneed torenegotiate bilateral agreements
concluded re-affirm theduty ofallParties t0afford full opportunity
forbilateral consultations andnegotiations *
f
Inorder toavoid having toaccept abnormally high reference levels ^
when recourse iscade toArticle 3measures following long drawn-out
Article 4negotiations ,ensure that forestalling operations areavoided "
for example .
–either byfixing time-linita fortheconclusion ofnegotiations
under Article 4,
orbyensuring theacceptance oftheprinciple that arequest for
negotiations under Article 4isdecaed tofixthereference period
forapossible request forconsul tations under Article 3«
4.Insofar a(gitcaybeagreed tolicit theconditions orcircumstances
inwhich recourse caybecade toArticle XIXofCATT fortheadoption
ofquantitative roctrictiono onproducts covered bythey.FA ,ensure that ,
iftherofcrcr.ce period contained inAnr.ex B(l)(a)isparticularly

.y'
-2-
tur.favourable tooneorothor party duetoabnormal circumstances , .
imports effected over aperiod ofseveral years cay "betaken into ,
account .
5.Define thescope for -more literal market access fordeveloping
countries wfyich arenewcomers tothenarkct and forthose which are
cost severely disadvantaged ,which would enable thegapbetween
then and thq.se suppliers whose exports already represent adominant
share oftrq.de .tobereduced totheextent that thelatter accept a"
stabilisation of-their situation ,andbearing inmind thefactors set
out inpoint 1aT>ove .
6.Ensure that theprovisions ofAnnex Adonotcreate difficulties forthe
adoption ofsafeguard measures whore market disruption iscaused by -
"price **considerations ,andconfirm that "price "and"quantity "maybe ;
taken separately into account . .
7.Ensure that ,inthocomposition oftheT3B,one ofthefactors 'which is
fundamental toitsproper balance -narnely thebalance between parties which
view trade problems asiir.portors and those which view then asexporters –
isnot distorted . Atthesame time ,ensure ,possibly byaslight
increase itsmembership ,that thoTCB'scomposition isbroadly
representative oftheparties totheArrangement .
8.Regarding handloom products ,seek confirmation oftheinterpretation
ofArticle 12,paragraph 3ftotheeffect that handloom articles are *,
notbesubject totheapplication oftheKFA'sprovisions ,provided that
agreed arrangements forcertification aredrawn upbetween th?-parties ,but
that ,inthoabsence ofsuch agreed arrangements ,orshould such
arrangements notoperate satisfactorily ,handloom products aresubject -»;-
tomeasured taken under thoNFA . Should thoneed arise ,further
proposals ?iaybemade inthecourse ofnegotiations .
Ensure that ,additional undertaking caninfuture ,"heo>>t»ined from
parties totheKFAwhich arenotCATT Contracting Farties ,sothat these
countries donot obtain core favourable treatment than that accorded to
Contracting Parties ,taking into account theprovisions oftheCATT
including itsannexes andprotocoles .

10.ProposeanArrangementof5-yearsduration.
11.Ehsureq,realistioandequitabletreatmentregardingthe
right®andobligationsofpossiblenewparties*©theArrangeseat.

ProposalforaCouncilDecisionauthorising the
CommissiontonegotiatetherenewaloftheArrangement
regardingInternational TradeinTextiles
*•
THECOUNCILOFTHEEUROPEANCOMMUNITIES,
HavingregardtotheTreatyestablishing theEuropeanEconomic
Community and,inparticularArticle113thereof,
Havingregardtotherecommendation fromthe.Commission ,
Whereasnegotiations aresoontoopenbetweenthepartiestothe
Arrangement regardingInternational TradeinTextiles,forits
possiblerenewalafter31.12.1977;
WhereastheCommunityshouldparticipate inthesenegotiations,
HASDECIDEDASFOLLOWS:
Article 1
TheCommissionisauthorisedtonegotiatetherenewaloftheArrangement
regardingInternational TradeinTextiles.
Article2
TheCommission shallconductthesenegotiations inconsultation withthe
specialCommitteeestablished underArticle113andonthebasisofthe
guidelines setoutintheAnnexhereto.
DoneatBrussels,t
ForthePresident