UNITED STATES - MEASURES AFFECTING TEXTILES AND APPAREL PRODUCTS
Document: Request for Consultations by the European Communities
Date: 3 June 1997
Document codes: WT/DS85/1; G/RO/D/1; G/TBT/D/13
Complainant: EU
Respondent: U.S.
Dispute stage: Consultation
Agreements cited: Art. III  GATT 1994Art. 2  Rules of OriginArt. 2  Technical Barriers to Trade (TBT)Art. 2, 4  Textiles and Clothing

UNITED STATES - MEASURES AFFECTING
TEXTILES AND APPAREL PRODUCTS
Request for Consultations by the European Communities
The following communication, dated 22 May 1997, from the Permanent Delegation of the
European Commission to the Permanent Mission of the United States and to the Dispute Settlement
Body, is circulated in accordance with Article 4.4 of the DSU.
My authorities have instructed me to request consultations with the United States of America
pursuant to Article 4 of the Understanding on Rules and Procedures Governing the Settlement of
Disputes, Article 8.4 of the Agreement on Textiles and Clothing, Article 7 of the Agreement on Rules
of Origin, Article 14 of the Agreement on Technical Barriers to Trade (TBT Agreement) and Article
XXII of the General Agreement on Tariffs and Trade 1994 (GATT 1994) regarding the change to US
rules of origin for textiles and apparel products.
The United States of America has introduced changes to its rules of origin for textile and apparel
products, which entered into force on 1 July 1996. Some of these rules, in particular the rules contained
in Section 334 of the Uruguay Round Agreements Act and implemented through customs regulation,
adversely affect exports of European Community fabrics, scarves and other flat textile products to the
United States of America. As a result of this change, European Community products are no longer
recognized in the USA as being of EC origin and lose the free access to the US market that they enjoyed
before.
The European Community considers that these changes are not in conformity with the obligations
of the United States under the WTO Agreement on Textiles and Clothing. Article 2.4 of the Agreement
on Textiles and Clothing requires that no new restriction in terms of products or Members shall be
introduced. Article 4.2 of the same Agreement prescribes that the introduction of changes in the
implementation or administration of restrictions notified to the WTO shall not: upset the balance of
rights and obligations between the Members; adversely affect the access available to a Member; impede
the full utilisation of such access; or disrupt trade under the Agreement. The European Community
is of the view that the change in US rules of origin causes precisely those effects and that the United
States should have initiated consultations with the European Community prior to the implementation
of such changes, in accordance with Article 4.4 of the Agreement.
Moreover, the European Community questions the compatibility of the above-mentioned changes
in US rules of origin with Article 2 of the Agreement on Rules of Origin which contains disciplines
that a Member must abide by when changing its rules of origin during the transitional period. These
disciplines prescribe, inter alia, that "...(b) the rules are not used as instruments to pursue trade

objectives, directly or indirectly, (c) they shall not themselves create restrictive, distorting or disruptive
effects on international trade, (...) and (e) they are administered in a consistent, uniform, impartial
and reasonable manner". The European Community is of the view that the new US rules of origin
do not respect such requirements.
Finally, the European Community is of the view that the US requirements on country of origin
marking correspond to a technical regulation as defined in Annex I to the TBT Agreement and, as
applied since the changes to the US rules of origin, do not guarantee to imported Community products
a treatment equivalent to the one granted to domestic products. This difference in treatment is not
compatible with Article III of GATT 1994 and Article 2 of the TBT Agreement.
The European Community looks forward to receiving your reply to this request and to fixing
a mutually acceptable date for consultations.