Source: EURLEX
Language: en
Format: md

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| 6.5.1995 | EN | Official Journal of the European Communities | L 104/2 |

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AGREEMENT

between the European Community and the People's Republic of China on trade in textile products not covered by the MFA bilateral Agreement on trade in textile products initialled on 9 December 1988 as extended and modified by the exchange of letters initialled on 8 December 1992

THE COUNCIL OF THE EUROPEAN UNION,

of the one part, and

THE GOVERNMENT OF THE PEOPLE'S REPUBLIC OF CHINA,

of the other part,

DESIRING to promote the orderly and equitable development of trade in textile products other than those made of cotton, wool, fine animal hair and man-made fibres, between the European Community (hereinafter referred to as ‘the Community’) and thre People's Republic of China (hereinafter referred to as ‘China’), with a view to strengthening cooperation and security for trade,

RESOLVED to take the fullest possible account of the serious economic and social problems at present affecting the textile industry in both importing and exporting countries and, in particular, to eliminate real risks of market disruption on the market of the Community and real risks of disruption to the textile trade of China,

HAVING REGARD to the Trade and Economic Cooperation Agreement between the Community and China,

THE COUNCIL OF THE EUROPEAN UNION:

THE GOVERNMENT OF THE PEOPLE'S REPUBLIC OF CHINA:

WHO HAVE AGREED AS FOLLOWS:

Article 1

1.   The present Agreement covers the trade in textile raw materials and textile products, falling within Section XI of the combined nomenclature, that are listed in Annex I originating in the People's Republic of China.

2.   Subject to the provisions of this or any subsequent Agreement, the Community undertakes, in respect of the products listed in Annex I, to suspend for the duration of this Agreement the application of quantitative import restrictions in force at the time of its initialling and not to introduce new quantitative restrictions, except as specified below.

3.   Without prejudice to anti-dumping and countervailing measures, measures having equivalent effect to quantitative restrictions on the importation into the Community of the products listed in Annex I shall be prohibited for the duration of this Agreement.

Article 2

1.   The classification of the products covered by this Agreement is based on the tariff and statistical nomenclature and on the Common Customs Tariff of the Community (hereinafter called the ‘combined nomenclature’ or in abbreviated form ‘CN’).

Any amendment to the combined nomenclature (CN) made in accordance with the procedures in force in the Community, concerning categories of products covered by this Agreement or any decision relating to the classification of goods shall not have the effect of reducing any quantitative limit introduced pursuant to this Agreement.

2.   The origin of the products covered by this Agreement shall be determined in accordance with the rules in force in the Community.

Any amendment to these rules of origin shall be communicated to China and shall not have the effect of reducing any quantitative limit introduced pursuant to this Agreement.

The procedures for control of the origin of the products referred to above are laid down in Protocol A.

Article 3

1.   China agrees to establish and maintain for each calendar year quantitative limits on its exports to the Community in accordance with Annex II. Such exports shall be subject to the double checking system specified in Protocol A.

2.   In administering the quantitative limits referred to in paragraph 1 China shall ensure that the Community textile industry shall benefit from utilization of the said limits.

More particularly, as regards categories 156, 157, 159 and 161, China undertakes to reserve, as a priority, 23 % of the quantitative limits concerned for users belonging to the Community textile industry during 90 days beginning on 1 January of each year.

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 by 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.

3.   In the event of denunciation of this Agreement as provided for in Article 17(3) the quantitative limits established in Annex II shall be reduced on a pro rata basis.

Article 4

1.   Imports into the Community of textile products covered by this Agreement shall not be subject to the quantitative limits established in Annex II provided that they are declared to be for re-export outside the 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 Chinese authorities, and to proof of origin in accordance with the provisions of Protocol A.

2.   Where the Community authorities ascertain that re-exports of textile products have been set off against a quantitative limit established under this Agreement, but that the products have subsequently been re-exported outside the Community, the authorities concerned shall inform the Chinese authorities within four weeks of the quantities involved and authorize imports of identical quantities of the same products which shall not be set off against the quantitative limit established under this Agreement for the current or the following year, as appropriate.

Article 5

1.   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 must be held within 15 working days of their being requested by the Community.

2.   China shall endeavour to ensure that exports of textile products subject to quantitative limits into the Community are spaced out as evenly as possible over the year, due account being taken in particular of seasonal factors.

Article 6

1.   China shall supply the Community with precise statistical information on all export licences issued for categories of textile products subject to the quantitative limits set out in Annex II, expressed in quantities and in terms of value and broken down by Member States of the Community.

2.   The Community shall likewise transmit to the Chinese authorities precise statistical information on import authorization or documents issued by the Community authorities and import statistics for products covered by the quantitative limits set out in Annex II.

3.   The information referred to in paragraphs 1 and 2 above shall, for all categories of products, be forwarded before the end of the month following the month to which the statistics relate.

4.   Upon request by the Community, China shall supply import statistics for all products covered by Annex I.

5.   Should it be found on analysis of the information exchanged 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 14 of this Agreement.

6.   For the purpose of applying the provisions of Article 7, the Community undertakes to provide the Chinese authorities before 15 April of each year with the preceding year's statistics on imports of all textile products covered by this Agreement, broken down by supplying country and Community Member States.

Article 7

1.   Exports of textile products not listed in Annex II to this Agreement may be made subject to quantitative limits on the conditions laid down in the following paragraphs.

2.   Where the Community finds, under the system of administrative control set up, that the level of imports of products in a given category not listed in Annex II originating in China, in relation to the preceding years' total imports into the Community from all sources of products in that category, reaches 25 % for categories covering silk products and 10 % for all the other products listed in Annex I, it may request the opening of consultations in accordance with the procedure described in Article 14 of this Agreement, with a view to reaching agreement on an appropriate restraint level for the products falling within such category.

The Community shall authorize the importation of products of the said category shipped from China before the date on which the request for consultations was submitted.

For the purposes of applying the provisions of this paragraph in the year 1995, the preceding year's total imports from all third countries shall be calculated on the basis of imports into the Community as constituted on 31 December 1994 and of imports into Austria, Finland and Sweden. Trade between the Community, Austria, Finland and Sweden, or between Austria, Finland and Sweden shall be excluded from this total.

3.   Pending a mutually satisfactory solution, China undertakes to limit exports of the products in the category concerned to the Community or to those regions of the Community market specified by the Community for a provisional period of three months from the date on which the request for consultations is made. Such provisional limit shall be established at 25 % of the level of imports reached during the calendar year preceding that in which imports exceeded the level resulting from the application of the formula set out in paragraph 2, and gave rise to the request for consultation, or 25 % of the level resulting from the application of the formula set out in paragraph 2, whichever is the higher.

4.   Should the Parties be unable in the course of consultations to reach a satisfactory solution within the period specified in Article 14 (1), the Community shall have the right to introduce a definitive quantitative limit at an annual level not lower than the level resulting from the application of the formula set out in paragraph 2, or 106 % of the level of imports reached during the calendar year preceding that in which imports exceeded the level resulting from the application of the formula set out in paragraph 2 and gave rise to the request for consultations, whichever is the higher.

The annual level so fixed shall be revised upwards after consultations in accordance with the procedure referred to in Article 14 with a view to fulfilling the conditions set out in paragraph 2, should the trend of total imports into the Community of the products in question make this necessary.

5.   The limits introduced under paragraph 2 or 4 may in no case be lower than the level of imports of products in that category originating in China in 1993.

6.   The provisions of this Article shall not apply where the percentages specified in paragraph 2 have been reached as a result of a fall in total imports into the Community, and not as a result of an increase in exports of products originating in China.

7.   In the event of the provisions of paragraph 2, 3 or 4 being applied, China undertakes to issue export licences for products covered by contracts concluded before the introduction of the quantitative limit, up to the volume of the quantitative limit fixed.

8.   Up to the date of communication of the statistics referred to in Article 6 (6), the provisions of paragraph 2 of this Article shall apply on the basis of the annual statistics previously communicated by the Community.

9.   The provisions of this Agreement which concern exports of products subject to the quantitative limits established in Annex II shall also apply to products for which quantitative limits are introduced pursuant to this Article.

Article 8

1.   In any Agreement year advance use of a portion of the quantitative limit established for the following Agreement year is authorized for each category of products up to 1 % of the quantitative limit for the current Agreement year, with a possibility to reach 5 % after consultations in accordance with Article 14 (1).

Amounts delivered in advance shall be deducted from the corresponding quantitative limits established for the following Agreement year.

2.   Carryover to the corresponding quantitative limit for the following Agreement year of the amounts not used during any Agreement year is authorized for each category of products up to 3 % of the quantitative limit for the current Agreement year, with a possibility to reach 7% after consultations in accordance with Article 14.

3.   Transfers between categories shall not be made except as follows:

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| — | transfers between categories 156, 157, 159 and 161 may be made up to 1,5 % of the quantitative limits for the category to which the transfer is made, |

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| — | transfers between the remaining categories may be made up to 6 % of the quantitative limit for the category to which the transfer is made. |

4.   The increase in any category of products resulting from the cumulative application of the provisions of paragraphs 1, 2, and 3 during an Agreement year shall not exceed 14 %.

5.   The table of equivalence applicable to the transfers referred to above is given in Annex I to this Agreement.

6.   Prior notification shall be given by the Chinese authorities in the event of recourse to the provisions of paragraphs 1, 2 and 3, at least 15 days in advance.

Article 9

1.   China and the Community agree to cooperate fully in preventing the circumvention of this Agreement by transhipment, rerouting or whatever other means.

2.   Where information available to the Community as a result of the investigations carried out in accordance with the procedures set out in Protocol A constitutes evidence that products of Chinese origin subject to quantitative limits established under this Agreement have been transhipped, rerouted or otherwise imported into the Community in circumvention of this Agreement, the Community may request the opening of consultations in accordance with the procedures described in Article 14, with a view to reaching agreement on an equivalent adjustment of the corresponding quantitative limits established under this Agreement.

3.   The two parties agree that in dealing with cases of circumvention the provisions of Article 5 of the Uruguay Round Agreement on Textiles and Clothing will be applied by the two parties, with the understanding that recourse to the TMB will become available as soon as both parties become Members of the WTO.

Article 10

The two Contracting Parties undertake to promote the exchange of visits by persons, groups and delegations from business, trade and industry, to facilitate contacts in the industrial, commercial and technical fields connected with trade in products and garments covered by the present Agreement and to assist in the organization of fairs and exhibitions of mutual interest.

The Contracting Parties, recognizing the need for an enhanced industrial cooperation for the products covered by this Agreement, will consult with a view to promoting action to encourage:

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| — | investments that may promote increased integration between silk industries of both Parties and technological exchanges, |

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| — | the establishment of an arbitration body recognized by both industries to address possible disputes concerning the fulfilment of conditions and terms set out in contracts regarding in particular issues concerning the quantities and quality of products to be delivered, |

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| — | the establishment of a system of grading and standards for silk recognized by both industries and of appropriate common methods of testing. |

Article 11

China and the Community recognize the special and differential character of reimports of textile products into the Community after processing in China.

Provided that they are effected in accordance with the Community regulations governing economic outward processing these reimports shall not be subject to the quantitative limits set out in Annex II when they are made in accordance with the specific arrangements laid down in Protocol B.

Article 12

China will ensure that the supply to the Community industry of raw materials shall be made at conditions not less favourable than to Chinese domestic users.

Article 13

China will ensure the respect of intellectual property rights on marks, designs and models belonging to Community operators. The two Parties, at the request of either of them, shall hold consultations in accordance with the procedure laid down in Article 14 for the purpose of finding an equitable solution to any dispute relating to the protection of intellectual property rights on products covered by this Agreement.

Article 14

1.   Save where it is otherwise provided for in this Agreement, the consultation procedures referred to in this Agreement shall be governed by the following rules:

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| — | any request for consultations shall be notified in writing to the other Party, |

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| — | the request for consultations shall be followed within a reasonable period (and in any case not later than 15 days following the notification) by a statement setting out the reasons and circumstances which, in the opinion of the requesting Party, justify the submission of such a request, |

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

2.   The Community may request consultations in accordance with paragraph 1 when it ascertains that during a particular year of application of the Agreement difficulties arise in the Community or one of its regions from a sharp and substantial increase in imports, by comparison to the preceding year.

Article 15

This Agreement shall be drawn up in two copies in the Danish, Dutch, English, Finnish, French, German, Greek, Italian, Portuguese, Spanish, Swedish and Chinese languages, each of these texts being equally authentic.

Article 16

As regards the Community, this Agreement shall apply to the territories in which the Treaty establishing the European Community is applied under the conditions laid down in that Treaty.

Article 17

1.   This Agreement shall enter into force on the first day of the month following the date of its signature. It shall apply with effect from 1 January 1995 and be applicable for a duration of two years. Thereafter, its application shall be automatically extended for successive periods of one year unless either Party notifies the other at least six months in advance that it does not agree with the extension.

2.   Should China become a Member of the World Trade Organization the restrictions in force shall be phased out in the framework of the Agreement on Textiles and Clothing of the Uruguay Round and notably the provisions of its Articles 2 (8), (13) and (14), 3 (2) (b) and 9.

3.   Either Party may at any time propose modifications to this Agreement or denounce it, provided that at least six months' notice is given. In that event, the Agreement shall come to an end at the expiry of the period of notice.

4.   The Annexes and Protocols to this Agreement and the Agreed Minutes joined thereto shall form an integral part thereof.

For the Government of the People's Republic of China

For the Council of the European Union

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