Proposal for a Council Decision on the signing, on behalf of the European Community, of the Agreement in the form of an exchange of letters between the European Community and the People's Republic of China initialled in Beijing on 19 May 2000 amending the Agreement between them on trade in textile products, and amending the Agreement between them initialled on 19 January 1995 on trade in textile products not covered by the MFA bilateral Agreement, and authorising its provisional application
Date: 2000-10-17
Institutions: European Commission
Subjects: China, agreement (EU), quantitative restriction, textile product, trade agreement

COMMISSION OF THE EUROPEAN COMMUNITIES

Brussels, 17.10.2000
COM(2000) 646 final

2000/0261 (ACC)

Proposal for a

COUNCIL DECISION

on the signing, on behalf of the European Community, of the Agreement in the form of
an Exchange of Letters between the European Community and the People’s Republic of
China initialled in Beijing on 19 May 2000 amending the Agreement between them on
trade in textile products , and amending the Agreement between them initialled on 19
January 1995 on trade in textile products not covered by the MFA bilateral Agreement,
and authorising its provisional application

(presented by the Commission)

EXPLANATORY MEMORANDUM

Pursuant to directives approved by the Council, the Commission and the People’s Republic of
China initialled on 6 December 1999 an agreement by way of exchange of letters designed to
ensure stability of trade for the year 2000 while providing for further negotiations on the
terms for future trade in the sector.

Following further negotiations in parallel with the negotiations between the European
Community and China concerning the terms of China’s accession to the World Trade
Organization the Commission and the People’s Republic of China on 19 May initialled the
enclosed Agreement by way of an excahnge of letters.

it

is proposed that the Council authorises the formal conclusion of this
Consequently,
Agreement. Pending the completion of the relevant procedures, the Commission proposes to
the Council to decide to apply provisionally this Agreement as from November 2000, subject
to reciprocity.

2

2000/0261 (ACC)

Proposal for a

COUNCIL DECISION

on the signing, on behalf of the European Community, of the Agreement in the form of
an Exchange of Letters between the European Community and the People’s Republic of
China initialled in Beijing on 19 May 2000 amending the Agreement between them on
trade in textile products , and amending the Agreement between them initialled on 19
January 1995 on trade in textile products not covered by the MFA bilateral Agreement,
and authorising its provisional application

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community and in particular Article
133 thereof, in conjunction with Article 300, second paragraph, first sentence thereof,

Having regard to the proposal from the Commission,

Whereas:

(1)

(2)

(3)

(4)

The Commission has negotiated on behalf of the European Community an Agreement
on trade in textile products with the People’s Republic of China.

The Agreement was initialled on 19 May 2000.

The Agreement should be signed on behalf of the European Community.

It is necessary to apply this Agreement on a provisional basis as from November 2000
pending the completion of the relevant procedures for its formal conclusion, subject to
reciprocity.

HAS DECIDED AS FOLLOWS:

Article 1

Subject to the conclusion thereof, the Agreement between the European Community and the
People’s Republic of China amending the Agreement between the European Economic
Community and the People’s Republic of China on trade in textile products and amending the
Agreement between the European Community and the People’s Republic of China initialled
on 19 January 1995 on trade in textile products not covered by the MFA bilateral Agreement
both as last amended by the Agreement initialled on 6 December 1999, shall be signed on
behalf of the European Community.

3

Article 2

The President of the Council is hereby authorised to designate the persons empowered to sign
the Agreement on behalf of the Community.

The text of the Agreement is attached to this Decision.

Article 3

The Agreement between the European Community and the People’s Republic of China
amending the Agreement between the European Economic Community and the People’s
Republic of China on trade in textile products and amending the Agreement between the
European Community and the People’s Republic of China initialled on 19 January 1995 on
trade in textile products not covered by the MFA bilateral Agreement both as last amended by
the Agreement initialled on 6 December 1999, shall be applied on a provisional basis as from
November 2000 pending the completion of the procedures for its conclusion, subject to
reciprocity.

Done at Brussels,

For the Council
The President

4

Sir,

1.

2.

3.

4.

ANNEX

Letter No 1

LETTER FROM THE COUNCIL OF THE EUROPEAN UNION

respective
I have the honour to refer to the consultations held between our
delegations for the purpose of amending and extending both the Agreement between
the European Economic Community and the People's Republic of China on trade in
textile products initialled on 9 December 1988, as last amended by an Agreement
initialled on 6 December 1999 (hereinafter referred to as 'the MFA Agreement') and
the Agreement between the European Community and the People’s Republic of
China initialled on 19 January 1995 on trade in textile products not covered by the
initialled on 6
MFA bilateral Agreement, as last amended by an Agreement
December 1999 (hereinafter referred to as ‘the non-MFA Agreement’).

As a result of the consultations, the Parties agreed to modify the MFA and non-MFA
Agreements.

Should the People’s Republic of China become a Member of the World Trade
Organisation before the date of expiry of the MFA and non-MFA bilateral
Agreements, the restrictions in force under those Agreements shall be phased out in
the framework of the WTO Agreement on Textiles and Clothing and China’s
Protocol of Accession to the WTO.

Without prejudice to Paragraph 3, and in particular without prejudice to safeguard
provisions, the Parties recorded their mutual understanding on the following aspects
concerning the notifications in respect of the restrictions under the MFA agreement
to be made to the Textiles Monitoring Body for the purposes of Article 2 of the
Agreement on Textiles and Clothing:

(a)

The European Union will notify to the Textiles Monitoring Body the
quantitative restrictions maintained under the MFA Agreement (save for those
quantitative limits concerning products already included by the European
Community in stages 1 or 2 of integration under the Agreement on Textiles and
Clothing) at the levels agreed for the year during which China accedes to the
WTO as being the restraint levels for the purposes of notification under Article
2 paragraph 1 of the Agreement on Textiles and Clothing, detailing the
quantitative limits contained in Annex III of the above agreement including the
quantitative limits reserved for European industry within those amounts and the
separate quantitative limits reserved for Outward Processing Traffic and
European Fairs respectively.

(b) The European Union will notify to the Textiles Monitoring Body the growth
rates applicable to the restraint levels, and the relevant parts thereof, being
those growth rates applied for the renewal of the MFA agreement for the year
2000.

(c)

These growth rates will be increased by the growth on growth provisions of the
Agreement on Textiles and Clothing for the 2nd stage of integration beginning

5

from 1 January of the year following accession, and, after 1.1.2002, by the
growth on growth provisions for the 3rd stage of integration.

(d) The European Union will notify the flexibility provisions contained in Article 5
of the MFA Agreement save for the cap on flexibilities contained in Article
5(5) as applying to the quantitative limits contained in Annex III of the above
agreement and to the limits set for European Fairs.

5.

Without prejudice to Paragraph 3, and in particular without prejudice to safeguard
provisions, the Parties recorded their mutual understanding on the following aspects
concerning the notifications in respect of the restrictions under the non-MFA
agreement to be made to the Textiles Monitoring Body for the purposes of Article 3
of the Agreement on Textiles and Clothing:

(a)

The European Community will notify to the Textiles Monitoring Body the
quantitative restrictions maintained under the non-MFA Agreement at the
levels specified for the year during which China accedes to the WTO as being
the restraint levels for the purposes of Article 3 of the Agreement on Textiles
and Clothing, detailing the quantitative limits contained in Annex II of the non-
MFA Agreement and the separate quantitative limits reserved for Outward
Processing Traffic.

(b) The Parties agree that pending liberalisation of

the above quantitative
restrictions the growth rates applied to them, and to the relevant parts thereof,
for the renewal of the non-MFA agreement for the year 2000 will apply
pending liberalisation of those restrictions and be included in the notification
pursuant to Article 3 of the Agreement on Textiles and Clothing.

(c)

The European Union will include the flexibility provisions contained in Article
8 of the non-MFA Agreement in its notification pursuant to Article 3 of the
Agreement on Textiles and Clothing.

(d) The Parties agreed that the European Community will align its programme in
accordance Article 3(2) of the ATC to phase out the quantitative restrictions
progressively to follow Annex I to this Agreement

The Parties agreed that following China’s WTO accession they would, pursuant to of
Article 2, Paragraph 17 of the Agreement on Textiles and Clothing, jointly notify to
the Textiles Monitoring Body the Administrative Arrangements contained in Annex
II to this Agreement. The Parties agreed that the administrative arrangements would
apply in respect of both the MFA Agreement and the non-MFA Agreement.

In the event that China accedes to the WTO after 31 December 2000 the Parties
agree that both the MFA Agreement and the non-MFA Agreement will be
automatically extended for a further period of one year to 31 December 2001, on the
basis of the quantitative limits for the year 2000, together with all the relevant parts
thereof including the quantities reserved for European industry, the quantities set for
outward processing traffic and for European fairs, increased by the growth rates, if
any, applied to the quantitative limits, and the relevant parts thereof, on the renewal
of the MFA Agreement and the non-MFA Agreement for the year 2000.

6.

7.

6

8.

I should be obliged if you could kindly confirm the acceptance of your Government
of the foregoing. Should this be the case, this Agreement in form of Exchange of
Letters shall enter into force on the first day of the month following the day on which
the Parties have notified each other that the legal procedures necessary to this end
it shall be applied provisionally from
have been completed. In the meantime,
November 2000 on conditions of reciprocity.

Please accept, Sir, the assurance of my highest consideration.

For the Council

of the European Union

7

Letter No 2

LETTER FROM THE GOVERNMENTOF
THE PEOPLE'S REPUBLIC OF CHINA

Sir,

I have the honour to acknowledge receipt of your letter which reads as follows:

“Sir,

1.

2.

3.

4.

I have the honour to refer to the consultations held between our
respective
delegations for the purpose of amending and extending both the Agreement between
the European Economic Community and the People's Republic of China on trade in
textile products initialled on 9 December 1988, as last amended by an Agreement
initialled on 6 December 1999 (hereinafter referred to as 'the MFA Agreement') and
the Agreement between the European Community and the People’s Republic of
China initialled on 19 January 1995 on trade in textile products not covered by the
MFA bilateral Agreement, as last amended by an Agreement
initialled on 6
December 1999 (hereinafter referred to as ‘the non-MFA Agreement’).

As a result of the consultations, the Parties agreed to modify the MFA and non-MFA
Agreements.

Should the People’s Republic of China become a Member of the World Trade
Organisation before the date of expiry of the MFA and non-MFA bilateral
Agreements, the restrictions in force under those Agreements shall be phased out in
the framework of the WTO Agreement on Textiles and Clothing and China’s
Protocol of Accession to the WTO.

Without prejudice to Paragraph 3, and in particular without prejudice to safeguard
provisions, the Parties recorded their mutual understanding on the following aspects
concerning the notifications in respect of the restrictions under the MFA agreement
to be made to the Textiles Monitoring Body for the purposes of Article 2 of the
Agreement on Textiles and Clothing:

(a)

The European Union will notify to the Textiles Monitoring Body the
quantitative restrictions maintained under the MFA Agreement (save for those
quantitative limits concerning products already included by the European
Community in stages 1 or 2 of integration under the Agreement on Textiles and
Clothing) at the levels agreed for the year during which China accedes to the
WTO as being the restraint levels for the purposes of notification under Article
2 paragraph 1 of the Agreement on Textiles and Clothing, detailing the
quantitative limits contained in Annex III of the above agreement including the
quantitative limits reserved for European industry within those amounts and the
separate quantitative limits reserved for Outward Processing Traffic and
European Fairs respectively.

(b) The European Union will notify to the Textiles Monitoring Body the growth
rates applicable to the restraint levels, and the relevant parts thereof, being
those growth rates applied for the renewal of the MFA agreement for the year
2000.

8

(c)

These growth rates will be increased by the growth on growth provisions of the
Agreement on Textiles and Clothing for the 2nd stage of integration beginning
from 1 January of the year following accession, and, after 1.1.2002, by the
growth on growth provisions for the 3rd stage of integration.

(d) The European Union will notify the flexibility provisions contained in Article 5
of the MFA Agreement save for the cap on flexibilities contained in Article
5(5) as applying to the quantitative limits contained in Annex III of the above
agreement and to the limits set for European Fairs.

5.

Without prejudice to Paragraph 3, and in particular without prejudice to safeguard
provisions, the Parties recorded their mutual understanding on the following aspects
concerning the notifications in respect of the restrictions under the non-MFA
agreement to be made to the Textiles Monitoring Body for the purposes of Article 3
of the Agreement on Textiles and Clothing:

(a)

The European Community will notify to the Textiles Monitoring Body the
quantitative restrictions maintained under the non-MFA Agreement at the
levels specified for the year during which China accedes to the WTO as being
the restraint levels for the purposes of Article 3 of the Agreement on Textiles
and Clothing, detailing the quantitative limits contained in Annex II of the non-
MFA Agreement and the separate quantitative limits reserved for Outward
Processing Traffic.

(b) The Parties agree that pending liberalisation of

the above quantitative
restrictions the growth rates applied to them, and to the relevant parts thereof,
for the renewal of the non-MFA agreement for the year 2000 will apply
pending liberalisation of those restrictions and be included in the notification
pursuant to Article 3 of the Agreement on Textiles and Clothing.

(c)

The European Union will include the flexibility provisions contained in Article
8 of the non-MFA Agreement in its notification pursuant to Article 3 of the
Agreement on Textiles and Clothing.

(d) The Parties agreed that the European Community will align its programme in
accordance Article 3(2) of the ATC to phase out the quantitative restrictions
progressively to follow Annex I to this Agreement

The Parties agreed that following China’s WTO accession they would, pursuant to of
Article 2, Paragraph 17 of the Agreement on Textiles and Clothing, jointly notify to
the Textiles Monitoring Body the Administrative Arrangements contained in Annex
II to this Agreement. The Parties agreed that the administrative arrangements would
apply in respect of both the MFA Agreement and the non-MFA Agreement.

In the event that China accedes to the WTO after 31 December 2000 the Parties
agree that both the MFA Agreement and the non-MFA Agreement will be
automatically extended for a further period of one year to 31 December 2001, on the
basis of the quantitative limits for the year 2000, together with all the relevant parts
thereof including the quantities reserved for European industry, the quantities set for
outward processing traffic and for European fairs, increased by the growth rates, if
any, applied to the quantitative limits, and the relevant parts thereof, on the renewal
of the MFA Agreement and the non-MFA Agreement for the year 2000.

9

6.

7.

8.

I should be obliged if you could kindly confirm the acceptance of your Government
of the foregoing. Should this be the case, this Agreement in form of Exchange of
Letters shall enter into force on the first day of the month following the day on which
the Parties have notified each other that the legal procedures necessary to this end
it shall be applied provisionally from
have been completed. In the meantime,
November 2000 on conditions of reciprocity.

Please accept, Sir, the assurance of my highest consideration.

For the Council

of the European Union”

I have the honour to confirm that my Government is in agreement with the contents of your
letter.

Please accept, Sir, the assurance of my highest consideration.

For the Government

of the People's Republic of China

10

Phase-out schedule for the quantitative restrictions notified pursuant to Article 3 of the
Agreement on Textiles and Clothing

Category
Ex13

Phasing of elimination of quota
Following accession

Annex I

Ex18

Ex20

Ex24

Ex39

115

117

118

120

122

123

124

125A

125B

126

127A

127B

136A

140

145

146A

146B

151B

156

157

159

160

161

Progressively

Progressively

Following accession

Following accession

Progressively

Progressively

Progressively

Progressively

Progressively

Following accession

Following accession

Following accession

Progressively

Progressively

Following accession

Following accession

Progressively

Following accession

Progressively

Progressively

Progressively

Following accession

Progressively

Progressively

Progressively

Progressively

Progressively

For those products that are to be phased out progressively in the above table the Parties agree
that, dependent on progress in the removal by China of state trading in respect of silk
products, the European Community will remove the restrictions on no less that 9 categories
on 1.1.2002 and the restrictions on all remaining products no later than 1.1.2005. Either Party
may at any time request consultations pursuant
to the procedures provided for in the
Administrative Arrangements agreed between the Parties concerning the application of the
above provisions. In order to facilitate such consultations the competent authorities of the
European Community will
inform the Chinese authorities of any intention to make a
notification in this regard to the Textiles Monitoring Body.

11

Administrative arrangements between the European Community
and the People’s Republic of China
for notification to the Textiles Monitoring Body
Under Article 2(17) of the Agreement on Textiles and Clothing

Annex II

Article 1 - Classification System

The classification of the products covered by these administrative arrangements is based on
the tariff and statistical nomenclature of the European Community (the Community)
(hereinafter called the "Combined Nomenclature", or in abbreviated form "CN") and any
amendments thereof.

Article 2 - Determination of Origin of Covered Products

1.

2.

The origin of the products covered by these administrative arrangements shall be
determined in accordance with the rules in force in the Community and the
procedures for control of the products set out in Protocol A.

If any amendment is made to the rules of origin, the Community shall, with the
agreement of the People’s Republic of China, take appropriate measures to avoid any
possible consequent reduction of the People’s Republic of China's ability to use the
quantitative limits established under Article 2 of the ATC.

Article 3 - Double-checking

The People’s Republic of China agrees to restrain its exports to the Community of the
products described in the notifications of the Community to the Textiles Monitoring Body
(TMB) under Article 2, paragraph 1, of the Agreement on Textiles and Clothing (ATC) to the
limits set out therein as increased by the growth rates provided under Article 2 of the ATC
and as may be modified by the flexibility provisions notified to the TMB under Article 2,
paragraph 1, of the ATC, until such time as these products are integrated into GATT 1994
under paragraphs 6, 8, or 9 of Article 2 of the ATC. Exports of restrained textile products
shall be subject to a double-checking system specified in Protocol A.

Article 4 - Industry reserve

1.

2.

3.

Within the limits described in the notifications of the Community to the Textiles
Monitoring Body (TMB) under Article 2, paragraph 1, of the Agreement on Textiles
and Clothing (ATC) the People’s Republic of China agrees to maintain a reserve
open for Community industry for the quantities and for the periods specified in the
footnotes to the notification.

To facilitate the implementation of these provisions the Community shall provide the
competent Chinese authorities, before the end of each year, with a list of interested
manufacturers and processors and, if possible, of the quantity of products requested
for each firm. To this end, the firms concerned are invited to make direct contact
with the relevant Chinese bodies by 15 February of the following year, in order to
make their purchasing intentions known.

The Chinese authorities undertake to operate the system in such a way as to ensure
the maximum possible utilisation of the industry reserve by Community industry

12

consistent with market forces. In order to do so China undertakes to operate the
system in a prompt and non-discriminatory manner; to provide the names and
addresses of the relevant foreign trade administrative bodies; to provide texts of the
relevant regulations as soon as they are available; to ensure that export licences under
to supply separate statistical
this system are identified as « industry reserve »;
information concerning licences issued pursuant
to
to these provisions; and,
cooperate with the European Community authorities to ensure that licences issued
pursuant to these provisions are identified within the exchanges of information via
the SIGL network established between the Community and China.

Article 5 - Amounts reserved for use at European Fairs

Within the limits described in the notifications of the Community to the Textiles Monitoring
Body (TMB) under Article 2, paragraph 1, of the Agreement on Textiles and Clothing (ATC)
the separate additional amounts specified for such purposes in the notification are reserved for
use at trade fairs on the understanding that such amounts may be used exclusively at
European Fairs. Such amounts may be modified by the flexibility provisions notified to the
TMB under Article 2, paragraph 1, of the ATC.

Article 6 - Re-imports after OPT

The People’s Republic of China and the Community recognise the special and differential
character of re-imports of textile products into the Community after processing in The
People’s Republic of China. Such re-imports may be provided for outside the quantitative
limits established under Articles 2 of the ATC provided that they are effected in accordance
with the regulations on economic outward processing in force in the Community.

Article 7 - Imports to EC for Re-export after Processing

1.

2.

Exports to the Community of textile products covered by these administrative
arrangements shall not be subject to quantitative limits established under Articles 2
they are declared to be for re-export outside the
of the ATC, provided that
Community in the same state or after processing, within the framework of the
administrative system of control which exists within the Community. However, the
release for home use within the Community of products imported under the
conditions referred to above shall be subject to the production of an export licence
issued by the People’s Republic of China authorities and to proof of origin, in
accordance with the provisions of Protocol A.

Where the competent authorities in the Community have evidence that products
exported from The People’s Republic of China and set off by The People’s Republic
of China against a quantitative limit established under Articles 2 of the ATC have
been subsequently re-exported outside the Community, the authorities concerned
shall notify The People’s Republic of China of the quantities involved. Upon receipt
of such notification, The People’s Republic of China may authorise exports for the
current or the following year of identical quantities of products, within the same
category, which shall not be set off against the quantitative limits established under
Article 2 of the ATC.

13

Article 8 – Cottage industry, handloom and folklore products

Cottage industry, handloom and folklore products fulfilling the definitions contained in
Protocol B to the MFA Agreement shall be exempt from the quantitative restrictions
established under Article 2 of the ATC provided they are accompanied by a certificate
conforming to the model annexed to these administrative arrangements. In case of divergent
opinions between China and the competent Community authorities at the point of entry into
the Community as to the nature of such products consultations shall be held within one month
with a view to resolving such difficulties. The Chines authorities undertake not to issue
certificates in respect of this exemption when exports of the products in question have
exceeded 15% of the quantitative limit for such a product established pursuant to Article 2 of
the ATC.

Article 9 – Operation of the SIGL system

The Parties agree that they will effect the management of licensing via the direct computer
links established between the Community’s SIGL system and the licensing computers of
MOFTEC pursuant to the arrangements agreed between them.

Article 10 - Statistical Verification of Carryover

The People’s Republic of China shall provide the Community with export data showing the
amounts of carryover available in any given year. The calculation of carry over will normally
be effected pursuant to the information and data provided via the SIGL system. If substantial
statistical differences exist between the export data from which the amount to be carried over
is calculated and the Community's data the Community may, within the first 120 days of the
following year, request consultations in accordance with the procedures referred to in
Article 15, paragraph 1 of these administrative arrangements on the amounts involved. Any
such request shall be accompanied by full particulars of the alleged statistical differences.
Where such a request is made, the portions carried over shall not be used until the parties have
completed consultations. If no such request is made within a 120-day period, the portion
carried over shall be presumed to have been calculated correctly.

Article 11 - Exchange of Statistical Information

1.

2.

3.

The People’s Republic of China undertakes to supply the Community with precise
statistical information on all export licences issued by the People’s Republic of
China authorities for all categories of textile products subject to the quantitative
limits established under Article 2 of the ATC. The People’s Republic of China shall
set out in its periodical statistical reports the maximum export
levels for each
category subject to a quantitative limit established under Articles 2 of the ATC and
the rate of utilisation of these levels.

The Community shall likewise transmit to the People’s Republic of China authorities
precise statistical
information on import documents issued by the Community
authorities in respect of export licences issued by the People’s Republic of China.
This information shall, for all categories of products, be transmitted before the end of
the second month following the quarter to which the statistics relate.

The Community shall transmit to the People’s Republic of China authorities import
statistics for products covered by Article 7, paragraph 1 of these administrative
arrangements.

14

4.

5.

6.

Should it be found on analysis of the information exchanged above that there are
significant discrepancies between the returns for exports and those for imports,
consultations may be initiated in accordance with the procedure specified in Article
15 paragraph 1 of these administrative arrangements. Any such consultations shall be
in the
resolved on the basis of the agreed descriptions of the products set out
notification under Article 2, paragraph 1, of the ATC.

The Parties agree that to the maximum extent possible such exchange of information
shall be made via the computer links established between the Community’s SIGL
system and the licensing computers of MOFTEC as referred to in Article 8.

In any event, the information provided for in paragraph 1 shall, for all categories of
products, be forwarded before the end of the month following the month to which the
statistics relate and the information referred to in paragraph 3 shall, for all categories
of products, be transmitted before the end of the third month following the quarter to
which the statistics relate, unless they have already been exchanged by electronic
means.

Article 12 - Amendments to Classification

1.

2.

The authorities of The People’s Republic of China shall be informed of any
amendment to the Combined Nomenclature or any decision, made in accordance
with the procedures in force in the Community, relating to the classification of
products covered by these administrative arrangements. Any such amendment or any
decision which results in a modification of the classification of products covered by
these administrative arrangements shall not have the effect of reducing The People’s
Republic of China's ability to use the quantitative limits established under Article 2
of the ATC. The procedures for the application of this paragraph are set out in
Protocol A.

in accordance with Article 15 paragraph 1 of

In case of divergent opinions between The People’s Republic of China and the
competent Community authorities at the point of entry into the Community on the
classification of products subject to quantitative limits established under Articles 2 of
the ATC, consultations
these
administrative arrangements shall be held with a view to reaching agreement on the
appropriate classification of the products concerned and to resolving any difficulties
arising therefrom. For this purpose, the authorities of The People’s Republic of
China shall be informed by the competent authorities of the Community as soon as a
case of divergent opinions on the classification of products arises. Pending
agreement on the appropriate classification and in order to avoid disruption to trade,
the products in question shall be imported on the basis of the classification indicated
by the competent Community authorities at the point of entry, in conformity with the
provisions of these administrative arrangements.

Article 13 - Circumvention

1.

The People’s Republic of China and the Community agree to cooperate fully in
preventing the circumvention of these administrative arrangements by transhipment,
re-routing or whatever other means in accordance with Article 5 of the Agreement on
Textiles and Clothing.

15

2.

3.

4.

Deduction of the relevant quantitative limits, once established pursuant to Article 5
of the Agreement on Textiles and Clothing, shall, as a general rule, be effected by
debiting an amount equivalent
to the agreed amounts from the corresponding
quantitative limits for the year in which the circumvention took place or for
subsequent years, the timing and apportioning of such debiting being decided in
consultation with the Community, to ensure that any debiting may be satisfactorily
implemented.

The People’s Republic of China confirms that its export control system permits the
prompt debiting of the amounts agreed for such purposes to the corresponding
quantitative limits established under Articles 2 of the ATC and the previous bilateral
Agreement.

Following China’s accession to the WTO cases of circumvention taking place before
accession will also be dealt with according to the above paragraphs.

Article 14 - Regional Concentration

1.

2.

3.

4.

5.

The quantitative limits established under Article 2 of the ATC on imports into the
Community of textile products of the People’s Republic of China origin will not be
broken down by the Community into regional shares.

Notwithstanding the above, for imperative technical or administrative reasons or to
find a solution to economic problems resulting from regional concentration of
imports, or in order to combat circumvention and fraud of the provisions of these
administrative arrangements, the Community will establish for a limited period of
time a specific management system in conformity with the principles of the Internal
Market. Should the Community have recourse to this provision, the textile products
covered by the corresponding export licences can only be put into free circulation in
the region(s) of the Community indicated in those licences. Similarly, the products
covered by the import licences can only be put into free circulation in the region(s) of
the Community indicated in those licences. This provision was invoked by the
Community as from 1 January 1993.

The parties shall cooperate in order to prevent sudden and prejudicial changes in
traditional trade flows resulting in regional concentration of direct imports into the
Community.

The People’s Republic of China shall monitor its exports of products under restraint
into the Community. Should a sudden and prejudicial change in traditional trade
flows arise, the Community will be entitled to request consultations in order to find a
satisfactory solution to those problems. Such consultations shall be held in
accordance with Article 15, paragraph 1 of these administrative arrangements. The
People’s Republic of China,
for and pending the
from the date of
consultations, will not
licences that would further aggravate the
problem.

issue export

request

the People’s Republic of China will,

However,
if the Parties are unable to reach a satisfactory solution during the
consultations,
if so requested by the
limits for one or more regions of the
Community, respect
Community. In such a case, these limits shall not preclude the importation into the
region(s) concerned of products which were shipped from the People’s Republic of

temporary export

16

China on the basis of export licences obtained before the date of formal notification
to the People’s Republic of China by the Community about the introduction of the
above limits. The Community shall inform the People’s Republic of China of the
technical and administrative measures that need to be introduced by both Parties so
that implementation is in conformity with principles of the Internal Market.

The People’s Republic of China shall endeavour to ensure that exports of textile
products subject to quantitative limits established under Articles 2 of the ATC into
the Community are spaced out as evenly as possible over the year due account being
taken in particular of seasonal factors.

The People’s Republic of China shall endeavour not to deprive certain regions of the
Community which have traditionally had relatively small shares of Community
quotas of imports of products serving as inputs for their processing industry. The
Community and the People’s Republic of China shall hold consultations, should the
need arise, in order to avert any problems which might occur in this respect.

6.

7.

Article 15 - Consultations

1.

2.

Save where it is otherwise provided for in these administrative arrangements, the
special consultation procedures referred to in these administrative arrangements shall
be governed by the following rules:

-

-

any request for consultations shall be notified in writing to the other Party,
together with a statement setting out the reasons and circumstances which, in
the opinion of the requesting Party, justify the submission of such a request;

the Parties shall enter into consultations within one month at the latest of
notification of the request, with a view to reaching agreement or a mutually
acceptable conclusion within one further month at the latest.

If necessary, at the request of either of the Parties consultations shall be held on any
problems arising from the application of these administrative arrangements. Any
consultations held under this Article shall be approached by both Parties in a spirit of
cooperation and with a desire to reconcile the differences between them.

Article 16 - Quantitative limits notified under Article 3

The Parties agree that these administrative arrangements will apply “mutatis mutandis” to the
quantitative limits notified by the European Community under Article 3 of the Agreement on
Textiles and Clothing.

17

PROTOCOL A

TITLE I

CLASSIFICATION

Article 1

The competent authorities of the Community undertake to inform the People’s
1.
Republic of China of any changes in the Combined Nomenclature (CN) before the date of
their entry into effect in the Community.

The competent authorities of the Community undertake to inform the People’s
2.
Republic of China of any decisions relating to the classification of products subject to these
administrative arrangements within one month of
the latest. Such
communication shall include:

their adoption at

(a)

(b)

(c)

a description of the products concerned;

the relevant category and the related tariff and statistical references;

the reasons which have led to the decision.

Where a decision on classification results in a change of classification practice or a
3.
change of category of any product subject
the
competent authorities of the Community shall provide 30 days' notice, from the date of the
Community's communication, before the decision is put into effect. Products shipped before
the date of application of the decision shall remain subject to the earlier classification practice,
provided that the goods in question are presented for importation into the Community within
60 days of that date.

to these administrative arrangements,

Where a Community decision on classification resulting in a change of classification
4.
practice or a change of categorisation of any product subject
to these administrative
arrangements affects a category subject to restraint, the Community undertakes to enter into
consultations without delay in accordance with the procedures described in paragraph 1 of
Article 15 of
these administrative arrangements with a view to agreeing necessary
adjustments to the appropriate quantitative limits established under Articles 2 of the ATC and
mitigating any disruptive effects which might arise from such a Community decision.

18

TITLE II

ORIGIN

Article 2

1.
Products originating in the People’s Republic of China for export to the Community in
accordance with the arrangements established by these administrative arrangements shall be
accompanied by a certificate of the People’s Republic of China origin conforming to the
model annexed to this Protocol.

2.
The certificate of the People’s Republic of China origin shall be issued by the
competent governmental authorities of the People’s Republic of China if the products in
question can be considered products originating in that country within the meaning of the
relevant rules in force in the Community.

3.
The certificates of the People’s Republic of China origin referred to in paragraph 1
shall not be required for products of Group III of the Community’s system of categories.
These may be imported into the Community in accordance with the arrangements set out in
these administrative arrangements on production of a declaration by the exporter on the
invoice or other commercial document relating to the products to the effect that the products
in question originated in China within the meaning of the relevant rules in force in the
Community.

4.
The certificate of the People’s Republic of China origin referred to in paragraph 1
shall not be required for import of goods covered by a certificate of origin Form A completed
in accordance with the relevant Community rules in order to qualify for generalised tariff
preferences.

Article 3

The discovery of slight discrepancies between the statements made in the certificate of origin
and those made in the documents produced to the customs office for the purpose of carrying
out the formalities for importing the product shall not
ipso facto cast doubt upon the
statements in the certificate.

19

TITLE III

DOUBLE-CHECKING SYSTEM FOR CATEGORIES OF PRODUCTS WITH
QUANTITATIVE LIMITS

Section I

Exportation

Article 4

The competent authorities of the People’s Republic of China shall issue an export licence in
respect of all consignments from the People’s Republic of China of textile products subject to
quantitative limits established under Article 2 of the ATC, up to the relevant quantitative
limits as increased by the growth rates provided under Article 2 of the ATC and as may be
modified by the flexibility provisions notified to the TMB under Article 2, paragraph 1, of the
ATC, until such time as these products are integrated into GATT 1994 under paragraphs 6, 8
or 9 of Article 2 of the ATC.

Article 5

1.
The export licence shall conform to the model annexed to this Protocol and it shall be
valid for exports throughout the customs territory to which the Treaty establishing the
European Community is applied.

2.

Each export licence shall only cover one of the categories of products.

These provisions are without prejudice to any subsequent arrangements the Parties
3.
may enter into concerning the electronic transmission of information to replace the grant of
export licences in paper form.

Article 6

The competent Community authorities must be notified forthwith of the withdrawal or
alteration of any export licence already issued.

Article 7

Exports shall be set off against the quantitative limits established under Articles 2 of
1.
the ATC for the year in which shipment of the goods has been effected, even if the export
licence is issued after such shipment.

For the purpose of applying paragraph 1, shipment of the goods is considered to have

2.
taken place on the date of their loading on to the exporting aircraft, vehicle or vessel.

Article 8

The presentation of an export licence, in application of Article 10 below, shall be effected not
later than 31 March of the year following that in which the goods covered by the export
licence have been shipped.

20

Section II

Importation

Article 9

Importation into the Community of textile products subject to quantitative limits established
under Articles 2 of the ATC shall be subject to the presentation of an import authorisation or
document.

Article 10

The competent Community authorities shall

issue such import authorisation or
1.
document automatically within five working days of the presentation by the importer of the
original of the corresponding export licence. The import authorisations shall be valid for six
months from the date of their issue for imports throughout the customs territory to which the
Treaty establishing the European Community is applied.

The competent Community authorities shall cancel

2.
the already issued import
authorisation or document if the corresponding export licence has been withdrawn. However,
if the competent Community authorities have not been notified of the withdrawal or
cancellation of the export
licence until after the products have been imported into the
Community, the quantities involved shall be set off against the quantitative limit established
under Articles 2 of the ATC for the category and the quota year in question and the People’s
Republic of China shall be informed as soon as possible.

Article 11

1.
If the competent Community authorities find that the total quantities covered by export
licences issued by the People’s Republic of China for a particular category in any given year
exceed the quantitative limit established under Article 2 of the ATC for that category as
increased by the growth rates provided under Article 2 of the ATC and as may be modified by
the flexibility provisions notified to the TMB under Article 2, paragraph 1, of the ATC, until
such time as these products are integrated into GATT 1994 under paragraphs 6, 8 or 9 of
import
Article 2 of the ATC,
authorisations or documents. In this event,
the competent Community authorities shall
immediately inform the authorities of the People’s Republic of China and the special
consultation procedure set out in Article 12 paragraph 1 of these administrative arrangements
shall initiated forthwith.

the said authorities may suspend the further

issue of

2.
Exports of restrained textile products of the People’s Republic of China origin not
covered by the People’s Republic of China export licences issued in accordance with the
provisions of this Protocol may be refused the issue of import authorisations or documents by
the competent Community authorities. However, if the import of such products is allowed
into the Community by the competent Community authorities, the quantities involved shall
not be set off against the appropriate quantitative limits established under Articles 2 of the
ATC, without the express agreement of the People’s Republic of China.

21

TITLE IV

FORM AND PRODUCTION OF EXPORT CERTIFICATES AND CERTIFICATES
OF ORIGIN, AND COMMON PROVISIONS

Article 12

1.
The export licence and the certificate of origin of the People’s Republic of China may
comprise additional copies duly indicated as such. They shall be made out in English or
French. If they are completed by hand, entries must be in ink and in printed script. These
documents shall measure 210 x 297 mm. The paper used must be writing paper weighing not
less than 25 g/m2. Only the original, clearly marked "original" shall be accepted by the
competent authorities of the Community as being valid for the purposes of export to the
Community in accordance with the arrangements established by these administrative
arrangements.

2.
Each export licence and certificate of the People’s Republic of China origin shall bear
a serial number, whether or not printed, by which it can be identified. The number for the
export licence shall be standardised and composed of the following elements:

-

-

two letters identifying the People’s Republic of China as follows: CN

two letters identifying the intended Member State of customs clearance as
follows:

AT = Austria

BL = Benelux

DE = Federal Republic of Germany

DK = Denmark

EL = Greece

ES

= Spain

FI

= Finland

FR = France

GB = United Kingdom

IE

IT

= Ireland

= Italy

PT = Portugal

SE = Sweden

-

a one-digit number identifying quota year, corresponding to the last figure in
year, e.g. 7 for 1987

22

-

-

two spaces identifying the particular issuing office concerned in the People’s
Republic of China

a five-digit number running consequently from 00001 to 99999 allocated to the
intended Member State of customs clearance.

Article 13

The export licence and certificate of origin may be issued after the shipment of the products to
which they relate. In such cases they shall bear either the endorsement "délivré à posteriori"
or the endorsement "issued retrospectively".

Article 14

1.
In the event of theft, loss or destruction of an export licence or a certificate of origin,
the exporter may apply to the competent governmental authority which issued the document
for a duplicate to be made out on the basis of the export documents in his possession. The
duplicate of any such certificate or licence so issued shall bear the endorsement "duplicata".

2.

The duplicate must bear the date of the original export licence or certificate of origin.

23

TITLE V

ADMINISTRATIVE COOPERATION

Article 15

The Community and the People’s Republic of China shall cooperate closely to implement the
provisions of these administrative arrangements. To this end, contacts and exchanges of views
(including on technical matters) shall be facilitated by both parties, in particular to establish
the authenticity and accuracy of documentation required under the provisions of these
administrative arrangements.

Article 16

The People’s Republic of China shall send to the Commission of the European Community
the names and addresses of the governmental authorities competent for the issue and
verification of export licences and certificates of origin together with specimens of the stamps
used by these authorities. the People’s Republic of China shall also notify the Commission of
any change in this information.

Article 17

Verification of certificates of the People’s Republic of China origin or export licences

1.
shall be carried out at random by the People’s Republic of China authorities.

2.
The competent Community authorities may request subsequent verification of
certificates of the People’s Republic of China origin or export licences at random or whenever
they have reasonable doubt as to the authenticity of such certificates or licences or as to the
accuracy of the information regarding the products in question. In such cases the competent
authorities in the Community shall return the certificate of the People’s Republic of China
origin or export licence, or a copy thereof to the People’s Republic of China authorities,
giving, where appropriate, the reasons for an enquiry. If the invoice has been submitted, such
invoice shall be attached to the certificate or licence or its copy. The authorities shall also
forward any information that has been obtained suggesting that the particulars given on the
said certificate or licence are inaccurate.

3.
Should the results of the random verification referred to in paragraph 1 above reveal
serious contravention of the provisions of these administrative arrangements, the People’s
Republic of China authorities shall notify the competent Community authorities of the results.
Where the competent Community authorities have requested verification under paragraph 2
above, the results of such verification shall be communicated to the competent Community
authorities within three months at the latest. The information communicated shall indicate
whether the disputed certificate or licence applies to the goods actually exported and whether
these goods are eligible for export in accordance with the arrangements established by these
administrative arrangements. Where the competent Community authorities so request, the
information communicated shall also include copies of such other available documentation as
may facilitate the full determination of the facts and, in particular, the true origin of the goods.

4.
For the purpose of subsequent verification of certificates of the People’s Republic of
these together with relevant supporting
China origin and export
documentation required to be lodged with the People’s Republic of China authorities for the

licences, copies of

24

issue of such certificates or licences shall be kept for a period of at least two years by the
People’s Republic of China authorities.

Article 18

Where the verification procedure referred to in Article 17 above or where information
1.
available to the Community or to the People’s Republic of China indicates or appears to
indicate that the provisions of these administrative arrangements are being contravened, both
parties shall cooperate closely and with appropriate urgency to prevent such contravention.

2.
To this end, the People’s Republic of China shall, on its own initiative or at the request
of the Community, carry out appropriate enquiries or arrange for such enquiries to be carried
out concerning operations which are or appear to be in contravention of these administrative
arrangements. The People’s Republic of China shall communicate the results of these
enquiries to the Community together with such other available information as may facilitate
the determination of the true origin of the goods.

By agreement between the Community and the People’s Republic of China, officials

3.
designated by the Community may be present at the enquiries referred to in paragraph 2.

In pursuance of the cooperation referred to in paragraph 1, the People’s Republic of
4.
China and the Community shall exchange any information considered by either party to be of
use in preventing the contravention of the provisions of these administrative arrangements.
These exchanges may include information on textile production in the People’s Republic of
China and on trade in textile products of a kind covered by these administrative arrangements
between the People’s Republic of China and other countries, particularly where the
Community has reasonable grounds to consider that the products in question may be in transit
across the territory of the People’s Republic of China prior to their importation into the
Community. This information shall include at the request of the Community copies of all
relevant documentation. The People’s Republic of China will provide such information as is
available and in accordance with the People’s Republic of China law.

5.
The Community shall where appropriate at the request of the People’s Republic of
China cooperate jointly with the People’s Republic of China in cases of circumvention which
in conformity with procedures in force in the
affect
Community.

the People’s Republic of China,

6.
Where it is established to the satisfaction of both parties that the provisions of these
administrative arrangements have been contravened, the People’s Republic of China and the
Community agree to take all
reasonable measures to prevent a recurrence of such
contravention.

25