CELEX: 51974PC0341
Language: en
Date: 1974-03-27 00:00:00
Title: RECOMMENDATION FOR A DECISION (EEC) OF THE COUNCIL authorizing the Commission to open negotiations with certain third countries for the conclusion of agreements on trade in textiles

ARCHIVES HISTORIQUES
DE LA COMMISSION
COLLECTION RELIEE DES
DOCUMENTS "COM"
COM (74) 341
Vol. 1974/0060
 ---pagebreak--- Disclaimer
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concernant l'ouverture au public des archives historiques de la Communauté économique
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In accordance with Council Regulation (EEC, Euratom) No 354/83 of 1 February 1983
concerning the opening to the public of the historical archives of the European Economic
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In Übereinstimmung mit der Verordnung (EWG, Euratom) Nr. 354/83 des Rates vom 1.
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 ---pagebreak--- COMMISSION OF THE EUROPEAN COMMUNITIES
                                                          COM(74) 341 final
                                                          Brussels , 27 March 1974
             RECOMMENDATION FOR A DECISION ( ESC ) OF THE COUNCIL
            authorizing the Commission to open negotiations with
               certain third countries for the conclusion of
                      agreements on trade in textiles
                ( submitted to the Counoil "by the Commission)
   COM(74 ) 341 final
 ---pagebreak---                                EXPLAMTORY STATEMENT
1.     The Arrangement regarding International Trade in Textiles ( MFA )
which was negotiated within the framework of the General Agreement on
Tariffs and Trade provides , in its Article 4 » that . participating importing
and exporting countries may conclude bilateral agreements on mutually
acceptable terms .
2.     Within the framework of the Long Term Arrangement on Cotton Textiles
( LTA) which expired on 31.12.73 . » the Community had entered into bilateral
agreements with the principal exporting countries (India, Pakistan, Japan,
Hong Kong , South Korea and Egypt ), in order to ensure the orderly develop­
ment of trade in cotton textiles .      These agreements committed the Community ,
in particular , to refrain from establishing new quantitative import
restrictions ( and to suspend those which were still in force ) on condition
that the exporting country did not exceed the agreed self-restraint levels
for its exports to the Community of products covered by the agreement .
The provisions of these agreements , which expired either on 30 September
1973 or 31 December 1973 » have been kept in force on a de facto basis
by the Community until 30 June 1974 » on the understanding that the exporting
countries concerned also take similar measures .
       Furthermore , the Community has concluded an agreement on trade in
cotton products with Yugoslavia which was not a party to the LTA. This
agreement which still remains in force until 31 December 1974 constitutes
the engagement analogous to the LTA accepted by Yugoslavia so that it
might benefit from tariff preferences for the products in question ( 2).
( 1 ) Ao regards I-Iacco , close and regular contact was established with the
      relevant authorities so that the evolution of textile exports from this
      territory could be followed,,
( 2 ) When making its offer on generalised tariff preferences , the Community
      considered that for cotton and directly substitutable products , tariff
      preferences would be granted to countries which were parties to the LTA
      or to those which were not parties to the LTA but which had accepted an
      obligation analogous to that provided by the LTA0
                                                                      ./•
 ---pagebreak---          On several occasions and. especially after the conclusion of the
GATT negotiations in Geneva for the new Arrangement regarding International
Trade in Textiles (MFA), most of the third countries concerned sought ,
expressly or through informal contacts with the services of the Commission ,
the opening of negotiations with the Community for the conclusion of
new agreements . The countries in question consider these agreements
to "be instruments which would enable them to ensure the expansion and
development of their textiles trade . Moreover these agreements very ofton
constitute a means whereby imports from all exporting countries may he
equitably balanced .
         Referring only to those countries with which the Community had
concluded "cotton" agreements ( l ), it must be noted that Japan , South
Korea , Hong Kong and Yugoslavia in addition to being exporters of cotton
products are also important exporters of artificial , synthetic and woollen
textiles . For certain of these products , all of which are covered by the
new multilateral Arrangement , it is undeniable that exports to the
Community have , during recent years , increased to a substantial extent .
It should be recalled that the "unsatisfactory situation " in world trade
in textile products , which is referred to in the Preamble of the multi-
fibres Arrangement , has been the major factor leading to the conclusion
of the present Arrangement .
( l ) Taiwan also figures amongst these countries . Although this is one
      of the most important suppliers in the textiles sector of both cotton
      and synthetic products , the Commission , which does not envisage
      negotiations with Taiwan will draw up appropriate dispositions in the
      near future .
 ---pagebreak---                                          3   -
3.      The Arrangement provides for the conclusion of bilateral agreements
in order to eliminate real risks of market disruption in importing coun­
tries ( l ). In this connection the Commission considers that the opening
of negotiations with     India , Pakistan , Japan , Hong Kong , South Korea,
Egypt and Yugoslavia     is both justified and necessary . Taking     into account
the wishes expressed     by certain of the countries in question ,    it seems
appropriate that the     Community attempts to conclude bilateral     agreements
with these countries within the time limit fixed in Article 2 of the HPA
and also before the expiry of the provisions by which those agreements which hae
                                                                                   I ;
already expired were maintained in force on a de facto basis till 30 June 1974*
Such agreements seem indiopensable in order to ensure the stability of the
Community textiles market with regard to exports from countries which are
particularly competitive , to facilitate the process of liberalization of
trade in this sector by an orderly development of exports and to maintain
existing trade patterns .
        However , if an examination in depth , which is to be conducted at the
same time , establishes that imports from other exporting countries consti­
tute a real risk of market disruption in the Community or if 3uch imports
hamper the process of liberalization agreed to by the Community together
with the other parties to the Arrangement , the elimination of lestrictions
on products from these countries might also be achieved by the inclusion
of the products in question in bilateral agreements negotiated in confor­
mity with Article 4 of "the Arrangement as provided for in its Article
2 ( 3 ) ( ii )« The Commission reserves the right to submit such appropriate
proposals to the Council as may prove necessary,,
( 1 ) In this sense it should be recalled that Article 2 of the Arrangement
       provides , in its paragraph 4 » that participating countries ,! shall
       afford full opportunity for bilateral consultation and negotiation
       aimed at mutually acceptable solutions in accordance with Articles 3
       and 4 of the Arrangement . 11
 ( 2 ) The agreement which is in force with Yugoslavia expires on 31«12-.>1974»
                                                                             /.
 ---pagebreak--- 4.     The agreements to be negotiated should be based essentially on the
principle of the autolimitation of exports by the countries in question .
Products covered by these agreements should be determined , taking into
account the concept of "selectivity" contained in the Arrangement , on a
case by case basis , having regard especially to the volume of imports
and their evolution during the reference years and to the .interchangeabi­
lity of fibres . Certain of these exporting countries are only concerned ,
at the present time , with cotton textiles .
        In conformity with Article 4 of "the MFA , these agreements must
contain provisions which facilitate the export in full of the levels
provided for under such agreements . They should also contain provision
for growth rates , carry-over , carry-forward and flexibility .    The
Arrangement alBO provides that the problem of developing countries should
be taken into consideration .
        Finally , it is appropriate to recall that the application of these
new agreements should ensure management by the Community of the agreed
autolimitation levels and should facilitate their full utilization .
        In this connection the Commission , in its memorandum to the Council
of 7«H O 1973 (l ) » setting out guidelines for the establishment of . a common
import regime for textiles had envisaged amongst other things ,
- the opening or progressive enlargement of a Community reserve ;
- the progressive enlargment of the quotas of those Member States which
   bear the lightest burden ;
- increased flexibility between Member Stated quotas . .
( l ) Doc. S/1213/73 ( COMER 225 )
 ---pagebreak---                                     - 5 -
5.     In conclusion , the Commission considers that the negotiations m
question (l ) should be opened as soon as possible .    To this end it
considers that the negotiating directives which the Council may lay down ,
should "be established taking due account of the diversity between countries
or groups of countries for which negotiations are envisaged and the
different problems which may arise with regard to one or other of these
groups of countries .
       It would be appropriate also that , at least at this stage , these
directives be laid down with sufficient flexibility so that they may
provide a common denominator for the whole of the negotiations .
       Once the opening of the negotiations ha3 been authorised it would
be appropriate^ in consultation with the special Article 113 Committee
which assists the Commission during negotiations, to settle the question
of quantities which are essential to the discussion of the particular case
of each of the third countries concerned.
6.     The Commission therefore recommends that the Council , by virtue of
Article 113 of the Treaty , takes the Decision annexed hereto .
   1
(l ) With India, Pakistan , Japan , Hong Kong, South Korea, Egypt and
     Yugoslaviae
 ---pagebreak---            RECOMMENDATION FOR A DECISION ( EEC ) OP TH3 COUNCIL
          authorising the Commission to open negotiations with
          certain third countries for the conclusion of agreements
                           on trade in textiles
THE COUNCIL OF THE EUROPEAN COMMUNITIES ,
Having regard to the Treaty establishing the European Economic Community
and in particular Article 113 thereof $
Having regard to the recommendation from the Commission ;
Whereas the Arrangement regarding International Trade in Textiles provides ,
in its Article 4j that importing and exporting countries may conclude
mutually acceptable bilateral agreements !
Whereas the Community had concluded bilateral agreements with India ,
Pakistan , Japan , Hong Kong , South Korea and Egypt within the framework of
the Long Term Arrangement on Trade in Cotton Textiles ,
Whereas the Community had similarly concluded a bilateral agreement on
cotton products with Yugoslavia , which was not a party to the Long Terra    »
Arrangement on Trade in Cotton Textiles ;
Whereas the third countries mentioned above are the most important suppliers
to the Community in the textile sector ;
Whereas , in order to facilitate the process of liberalization of trade in
the textile sector by an orderly development of exports , permitting at the
same time the achievement of an appropriate degree of protection for the
Community market , negotiations should be opened with these countries for
the conclusion of bilateral agreements on trade in textiles }
 ---pagebreak--- DECIDE0
                                   Article 1
     The GuMimssion is authorised to open negotiations with South Korea ,
Hong Kong , India , Japan , Pakistan , Egypt and Yugoslavia for the conclusion
of bilateral agreements on trade in textiles , in conformity with the
provisions of the Arrangement regarding International Trade in Textiles .
                                   Article 2
     The Commission shall conduct these negotiations in consultation with
the special committee appointed under Article 113 and on the basis of the
direct iv® annexed hereto *
Done at Brussels ,                                  For the Council
                                                     The President
 ---pagebreak---                                                             ANNEX
                          NTSGOTIATIKG DIRECTIVES
a ) Nature of the Agreements :
    Autolimitation a-greements in conformity with, the provisions of the
    multilateral Arrangement regarding International Trade in Textiles the
    duration of which shall "be equivalent to that of the multifibres
    Arrangement .
b ) Countries with which negotiations shall be opened :
    Countries which had concluded bilateral agreements on trade in cotton
    textiles with the Community and which have accepted the multilateral
    Arrangement regarding International Trade in Textiles .
c ) Products covered by the agreements :
    On the one hand , categories of products and , on the other hand , specific
    products , the inclusion of which according to their origin to be
    justified under Article 4 of the multifibres Arrangement .
    In order to avoid the circumvention of the provisions of the agreements
    by changes in the mixtures of fibres , it will be necessary to insert a
    clause similar to Article 8 of the " cotton" agreement between the
    Community and Yugoslavia,
    A clause allowing ceilings to be fixed within categories of products
    contained in the agreements in cases v:here an abnormal concentration on
    certain products was established .
d ) Autolimitation ceilings and provisions relating thereto :
    Ceilings to be fixed on the basis of the latest available reference year
    with coefficient of growth .
    Appropriate provisions for transfer between ceiling^ for carry-over from
    one yea.r to the next of unused quantities and for carry–forward to the
    following year .
    Management of ceilings according to the double control system .