that Ministers agreed at Punta del Este that “negotiations in the
area of textiles and clothing shall aim to formulate modalities that
would permit the eventual integration of this sector into GATT on
the basis of strengthened GATT rules and disciplines, thereby also
contributing to the objective of further liberalization of trade”;
also that in the April 1989 Decision of the Trade Negotiations Committee
it was agreed that the process of integration should commence following
the conclusion of the Uruguay Round of Multilateral Trade Negotiations
and should be progressive in character;
further that it was agreed that special treatment should be accorded
to the least-developed country Members;
agree as follows:
1. This Agreement sets
out provisions to be applied by Members during a transition period
for the integration of the textiles and clothing sector into GATT
agree to use the provisions of paragraph 18 of
Article 2 and paragraph 6(b) of
Article 6 in such a way as to permit meaningful increases in access
possibilities for small suppliers and the development of commercially
significant trading opportunities for new entrants in the field of
textiles and clothing trade.
shall have due regard to the situation of those Members which have
not accepted the Protocols extending the Arrangement Regarding International
Trade in Textiles (referred to in this Agreement as the “MFA”) since
1986 and, to the extent possible, shall afford them special treatment
in applying the provisions of this Agreement.
agree that the particular interests of the cotton-producing exporting
Members should, in consultation with them, be reflected in the implementation
of the provisions of this Agreement.
5. In order to facilitate
the integration of the textiles and clothing sector into GATT 1994,
Members should allow for continuous autonomous industrial adjustment
and increased competition in their markets.
6. Unless otherwise provided
in this Agreement, its provisions shall not affect the rights and
obligations of Members under the provisions of the WTO Agreement and
the Multilateral Trade Agreements.
7. The textile and clothing
products to which this Agreement applies are set out in the Annex.
1. All quantitative restrictions within bilateral agreements maintained under Article 4 or notified under Article 7 or 8 of the MFA in force on the day before the entry into force of the WTO Agreement shall, within 60 days following such entry into force, be notified in detail, including the restraint levels, growth rates and flexibility provisions, by the Members maintaining such restrictions to the Textiles Monitoring Body provided for in Article 8 (referred to in this Agreement as the “TMB”). Members agree that as of the date of entry into force of the WTO Agreement, all such restrictions maintained between GATT 1947 contracting parties, and in place on the day before such entry into force, shall be governed by the provisions of this Agreement.
2. The TMB shall circulate
these notifications to all Members for their information. It is open
to any Member to bring to the attention of the TMB, within 60 days
of the circulation of the notifications, any observations it deems
appropriate with regard to such notifications. Such observations shall
be circulated to the other Members for their information. The TMB
may make recommendations, as appropriate, to the Members concerned.
3. When the 12-month period
of restrictions to be notified under paragraph 1 does not coincide
with the 12-month period immediately preceding the date of entry into
force of the WTO Agreement, the Members concerned should mutually
agree on arrangements to bring the period of restrictions into line
with the agreement year,
and to establish notional base levels of such restrictions in order
to implement the provisions of this Article. Concerned Members agree
to enter into consultations promptly upon request with a view to reaching
such mutual agreement. Any such arrangements shall take into account,
inter alia, seasonal patterns of shipments in recent years.
The results of these consultations shall be notified to the TMB, which
shall make such recommendations as it deems appropriate to the Members
4. The restrictions notified
under paragraph 1 shall be deemed to constitute the totality of such
restrictions applied by the respective Members on the day before the
entry into force of the WTO Agreement. No new restrictions in terms
of products or Members shall be introduced except under the provisions
of this Agreement or relevant GATT 1994 provisions.
Restrictions not notified within 60 days of the date of entry into
force of the WTO Agreement shall be terminated forthwith.
5. Any unilateral measure
taken under Article 3 of the MFA prior to the date of entry into force
of the WTO Agreement may remain in effect for the duration specified
therein, but not exceeding 12 months, if it has been reviewed by the
Textiles Surveillance Body (referred to in this Agreement as the “TSB”)
established under the MFA. Should the TSB not have had the opportunity
to review any such unilateral measure, it shall be reviewed by the
TMB in accordance with the rules and procedures governing Article
3 measures under the MFA. Any measure applied under an MFA Article
4 agreement prior to the date of entry into force of the WTO Agreement
that is the subject of a dispute which the TSB has not had the opportunity
to review shall also be reviewed by the TMB in accordance with the
MFA rules and procedures applicable for such a review.
6. On the date of entry into force of the WTO Agreement, each Member shall integrate into GATT 1994 products which accounted for not less than 16 per cent of the total volume of the Member’s 1990 imports of the products in the Annex, in terms of HS lines or categories. The products to be integrated shall encompass products from each of the following four groups: tops and yarns, fabrics, made-up textile products, and clothing.
7. Full details of the actions to be taken pursuant to paragraph 6 shall be notified by the Members concerned according to the following:
(a) Members maintaining restrictions falling under paragraph 1 undertake, notwithstanding the date of entry into force of the WTO Agreement, to notify such details to the GATT Secretariat not later than the date determined by the Ministerial Decision of 15 April 1994. The GATT Secretariat shall promptly circulate these notifications to the other participants for information. These notifications will be made available to the TMB, when established, for the purposes of paragraph 21;
(b) Members which have, pursuant to paragraph 1 of Article 6, retained the right to use the provisions of Article 6, shall notify such details to the TMB not later than 60 days following the date of entry into force of the WTO Agreement, or, in the case of those Members covered by paragraph 3 of Article 1, not later than at the end of the 12th month that the WTO Agreement is in effect. The TMB shall circulate these notifications to the other Members for information and review them as provided in paragraph 21.
8. The remaining products, i.e. the products not integrated into GATT 1994 under paragraph 6, shall be integrated, in terms of HS lines or categories, in three stages, as follows:
(a) on the first day of the 37th month that the WTO Agreement is in effect, products which accounted for not less than 17 per cent of the total volume of the Member’s 1990 imports of the products in the Annex. The products to be integrated by the Members shall encompass products from each of the following four groups: tops and yarns, fabrics, made-up textile products, and clothing;
(b) on the first day of the 85th month that the WTO Agreement is in effect, products which accounted for not less than 18 per cent of the total volume of the Member’s 1990 imports of the products in the Annex. The products to be integrated by the Members shall encompass products from each of the following four groups: tops and yarns, fabrics, made-up textile products, and clothing;
(c) on the first day of the 121st month that the WTO Agreement is in effect, the textiles and clothing sector shall stand integrated into GATT 1994, all restrictions under this Agreement having been eliminated.
which have notified, pursuant to paragraph 1 of
Article 6, their intention not to retain the right to use the
provisions of Article 6 shall, for the purposes of this Agreement,
be deemed to have integrated their textiles and clothing products
into GATT 1994. Such Members shall, therefore, be exempted from complying
with the provisions of paragraphs 6 to 8 and 11.
10. Nothing in this Agreement shall
prevent a Member which has submitted an integration programme pursuant
to paragraph 6 or 8 from integrating products into GATT 1994 earlier
than provided for in such a programme. However, any such integration
of products shall take effect at the beginning of an agreement year,
and details shall be notified to the TMB at least three months prior
thereto for circulation to all Members.
11. The respective programmes of integration,
in pursuance of paragraph 8, shall be notified in detail to the TMB
at least 12 months before their coming into effect, and circulated
by the TMB to all Members.
12. The base levels of the restrictions
on the remaining products, mentioned in paragraph 8, shall be the
restraint levels referred to in paragraph 1.
13. During Stage 1 of this Agreement
(from the date of entry into force of the WTO Agreement to the 36th
month that it is in effect, inclusive) the level of each restriction
under MFA bilateral agreements in force for the 12-month period prior
to the date of entry into force of the WTO Agreement shall be increased
annually by not less than the growth rate established for the respective
restrictions, increased by 16 per cent.
14. Except where the Council for Trade in Goods or the Dispute Settlement Body decides otherwise under paragraph 12 of Article 8, the level of each remaining restriction shall be increased annually during subsequent stages of this Agreement by not less than the following:
(a) for Stage 2 (from the 37th to the 84th month that the WTO Agreement is in effect, inclusive), the growth rate for the respective restrictions during Stage 1, increased by 25 per cent;
(b) for Stage 3 (from the 85th to the 120th month that the WTO Agreement is in effect, inclusive), the growth rate for the respective restrictions during Stage 2, increased by 27 per cent.
15. Nothing in this Agreement shall
prevent a Member from eliminating any restriction maintained pursuant
to this Article, effective at the beginning of any agreement year
during the transition period, provided the exporting Member concerned
and the TMB are notified at least three months prior to the elimination
coming into effect. The period for prior notification may be shortened
to 30 days with the agreement of the restrained Member. The TMB shall
circulate such notifications to all Members. In considering the elimination
of restrictions as envisaged in this paragraph, the Members concerned
shall take into account the treatment of similar exports from other
provisions, i.e. swing, carryover and carry forward, applicable to
all restrictions maintained pursuant to this Article, shall be the
same as those provided for in MFA bilateral agreements for the 12-month
period prior to the entry into force of the WTO Agreement. No quantitative
limits shall be placed or maintained on the combined use of swing,
carryover and carry forward.
arrangements, as deemed necessary in relation to the implementation
of any provision of this Article, shall be a matter for agreement
between the Members concerned. Any such arrangements shall be notified
to the TMB.
18. As regards those
Members whose exports are subject to restrictions on the day before
the entry into force of the WTO Agreement and whose restrictions represent
1.2 per cent or less of the total volume of the restrictions applied
by an importing Member as of 31 December 1991 and notified under this
Article, meaningful improvement in access for their exports shall
be provided, at the entry into force of the WTO Agreement and for
the duration of this Agreement, through advancement by one stage of
the growth rates set out in paragraphs 13 and 14, or through at least
equivalent changes as may be mutually agreed with respect to a different
mix of base levels, growth and flexibility provisions. Such improvements
shall be notified to the TMB.
19. In any case, during the duration
of this Agreement, in which a safeguard measure is initiated by a
Article XIX of GATT 1994
in respect of a particular product during a period of one year immediately
following the integration of that product into GATT 1994 in accordance
with the provisions of this Article, the provisions of Article XIX,
as interpreted by the Agreement on Safeguards, will apply, save as
set out in paragraph 20.
20. Where such a measure is applied
using non-tariff means, the importing Member concerned shall apply
the measure in a manner as set forth in paragraph 2(d) of
XIII of GATT 1994 at the request of any exporting Member whose
exports of such products were subject to restrictions under this Agreement
at any time in the one-year period immediately prior to the initiation
of the safeguard measure. The exporting Member concerned shall administer
such a measure. The applicable level shall not reduce the relevant
exports below the level of a recent representative period, which shall
normally be the average of exports from the Member concerned in the
last three representative years for which statistics are available.
Furthermore, when the safeguard measure is applied for more than one
year, the applicable level shall be progressively liberalized at regular
intervals during the period of application. In such cases the exporting
Member concerned shall not exercise the right of suspending substantially
equivalent concessions or other obligations under paragraph 3(a) of
Article XIX of GATT 1994.
21. The TMB shall keep under review
the implementation of this Article. It shall, at the request of any
Member, review any particular matter with reference to the implementation
of the provisions of this Article. It shall make appropriate recommendations
or findings within 30 days to the Member or Members concerned, after
inviting the participation of such Members.
1. Within 60 days following
the date of entry into force of the WTO Agreement, Members maintaining
on textile and clothing products (other than restrictions maintained
under the MFA and covered by the provisions of
2), whether consistent with GATT 1994 or not, shall (a)
notify them in detail to the TMB, or (b) provide to the TMB
notifications with respect to them which have been submitted to any
other WTO body. The notifications should, wherever applicable, provide
information with respect to any GATT 1994 justification for the restrictions,
including GATT 1994 provisions on which they are based.
2. Members maintaining restrictions falling under paragraph 1, except those justified under a GATT 1994 provision, shall either:
(a) bring them into conformity with GATT 1994 within one year following the entry into force of the WTO Agreement, and notify this action to the TMB for its information; or
(b) phase them out progressively according to a programme to be presented to the TMB by the Member maintaining the restrictions not later than six months after the date of entry into force of the WTO Agreement. This programme shall provide for all restrictions to be phased out within a period not exceeding the duration of this Agreement. The TMB may make recommendations to the Member concerned with respect to such a programme.
3. During the duration
of this Agreement, Members shall provide to the TMB, for its information,
notifications submitted to any other WTO bodies with respect to any
new restrictions or changes in existing restrictions on textile and
clothing products, taken under any GATT 1994 provision, within 60
days of their coming into effect.
4. It shall be open to
any Member to make reverse notifications to the TMB, for its information,
in regard to the GATT 1994 justification, or in regard to any restrictions
that may not have been notified under the provisions of this Article.
Actions with respect to such notifications may be pursued by any Member
under relevant GATT 1994 provisions or procedures in the appropriate
5. The TMB shall circulate the notifications made pursuant to this Article to all Members for their information.
referred to in
Article 2, and
those applied under
shall be administered by the exporting Members. Importing Members
shall not be obliged to accept shipments in excess of the restrictions
notified under Article 2, or of restrictions applied pursuant to Article
agree that the introduction of changes, such as changes in practices,
rules, procedures and categorization of textile and clothing products,
including those changes relating to the Harmonized System, in the
implementation or administration of those restrictions notified or
applied under this Agreement should not: upset the balance of rights
and obligations between the Members concerned under this Agreement;
adversely affect the access available to a Member; impede the full
utilization of such access; or disrupt trade under this Agreement.
3. If a product which
constitutes only part of a restriction is notified for integration
pursuant to the provisions of Article 2, Members agree that any change
in the level of that restriction shall not upset the balance of rights
and obligations between the Members concerned under this Agreement.
4. When changes mentioned
in paragraphs 2 and 3 are necessary, however, Members agree that the
Member initiating such changes shall inform and, wherever possible,
initiate consultations with the affected Member or Members prior to
the implementation of such changes, with a view to reaching a mutually
acceptable solution regarding appropriate and equitable adjustment.
Members further agree that where consultation prior to implementation
is not feasible, the Member initiating such changes will, at the request
of the affected Member, consult, within 60 days if possible, with
the Members concerned with a view to reaching a mutually satisfactory
solution regarding appropriate and equitable adjustments. If a mutually
satisfactory solution is not reached, any Member involved may refer
the matter to the TMB for recommendations as provided in
8. Should the TSB not have had the opportunity to review a dispute
concerning such changes introduced prior to the entry into force of
the WTO Agreement, it shall be reviewed by the TMB in accordance with
the rules and procedures of the MFA applicable for such a review.
agree that circumvention by transshipment, re-routing, false declaration
concerning country or place of origin, and falsification of official
documents, frustrates the implementation of this Agreement to integrate
the textiles and clothing sector into GATT 1994. Accordingly, Members
should establish the necessary legal provisions and/or administrative
procedures to address and take action against such circumvention.
Members further agree that, consistent with their domestic laws and
procedures, they will cooperate fully to address problems arising
2. Should any Member believe
that this Agreement is being circumvented by transshipment, re-routing,
false declaration concerning country or place of origin, or falsification
of official documents, and that no, or inadequate, measures are being
applied to address and/or to take action against such circumvention,
that Member should consult with the Member or Members concerned with
a view to seeking a mutually satisfactory solution. Such consultations
should be held promptly, and within 30 days when possible. If a mutually
satisfactory solution is not reached, the matter may be referred by
any Member involved to the TMB for recommendations.
agree to take necessary action, consistent with their domestic laws
and procedures, to prevent, to investigate and, where appropriate,
to take legal and/or administrative action against circumvention practices
within their territory. Members agree to cooperate fully, consistent
with their domestic laws and procedures, in instances of circumvention
or alleged circumvention of this Agreement, to establish the relevant
facts in the places of import, export and, where applicable, transshipment.
It is agreed that such cooperation, consistent with domestic laws
and procedures, will include: investigation of circumvention practices
which increase restrained exports to the Member maintaining such restraints;
exchange of documents, correspondence, reports and other relevant
information to the extent available; and facilitation of plant visits
and contacts, upon request and on a case-by-case basis. Members should
endeavour to clarify the circumstances of any such instances of circumvention
or alleged circumvention, including the respective roles of the exporters
or importers involved.
4. Where, as a result
of investigation, there is sufficient evidence that circumvention
has occurred (e.g. where evidence is available concerning the country
or place of true origin, and the circumstances of such circumvention),
Members agree that appropriate action, to the extent necessary to
address the problem, should be taken. Such action may include the
denial of entry of goods or, where goods have entered, having due
regard to the actual circumstances and the involvement of the country
or place of true origin, the adjustment of charges to restraint levels
to reflect the true country or place of origin. Also, where there
is evidence of the involvement of the territories of the Members through
which the goods have been transshipped, such action may include the
introduction of restraints with respect to such Members. Any such
actions, together with their timing and scope, may be taken after
consultations held with a view to arriving at a mutually satisfactory
solution between the concerned Members and shall be notified to the
TMB with full justification. The Members concerned may agree on other
remedies in consultation. Any such agreement shall also be notified
to the TMB, and the TMB may make such recommendations to the Members
concerned as it deems appropriate. If a mutually satisfactory solution
is not reached, any Member concerned may refer the matter to the TMB
for prompt review and recommendations.
note that some cases of circumvention may involve shipments transiting
through countries or places with no changes or alterations made to
the goods contained in such shipments in the places of transit. They
note that it may not be generally practicable for such places of transit
to exercise control over such shipments.
agree that false declaration concerning fibre content, quantities,
description or classification of merchandise also frustrates the objective
of this Agreement. Where there is evidence that any such false declaration
has been made for purposes of circumvention, Members agree that appropriate
measures, consistent with domestic laws and procedures, should be
taken against the exporters or importers involved. Should any Member
believe that this Agreement is being circumvented by such false declaration
and that no, or inadequate, administrative measures are being applied
to address and/or to take action against such circumvention, that
Member should consult promptly with the Member involved with a view
to seeking a mutually satisfactory solution. If such a solution is
not reached, the matter may be referred by any Member involved to
the TMB for recommendations. This provision is not intended to prevent
Members from making technical adjustments when inadvertent errors
in declarations have been made.
recognize that during the transition period it may be necessary to
apply a specific transitional safeguard mechanism (referred to in
this Agreement as “transitional safeguard”). The transitional safeguard
may be applied by any Member to products covered by the Annex, except
those integrated into GATT 1994 under the provisions of
2. Members not maintaining restrictions falling under Article
2 shall notify the TMB within 60 days following the date of entry
into force of the WTO Agreement, as to whether or not they wish to
retain the right to use the provisions of this Article. Members which
have not accepted the Protocols extending the MFA since 1986 shall
make such notification within 6 months following the entry into force
of the WTO Agreement. The transitional safeguard should be applied
as sparingly as possible, consistently with the provisions of this
Article and the effective implementation of the integration process
under this Agreement.
action may be taken under this Article when, on the basis of a determination
by a Member,
it is demonstrated that a particular product is being imported into
its territory in such increased quantities as to cause serious damage,
or actual threat thereof, to the domestic industry producing like
and/or directly competitive products. Serious damage or actual threat
thereof must demonstrably be caused by such increased quantities in
total imports of that product and not by such other factors as technological
changes or changes in consumer preference.
3. In making a determination
of serious damage, or actual threat thereof, as referred to in paragraph
2, the Member shall examine the effect of those imports on the state
of the particular industry, as reflected in changes in such relevant
economic variables as output, productivity, utilization of capacity,
inventories, market share, exports, wages, employment, domestic prices,
profits and investment; none of which, either alone or combined with
other factors, can necessarily give decisive guidance.
4. Any measure invoked pursuant
to the provisions of this Article shall be applied on a Member-by-Member
basis. The Member or Members to whom serious damage, or actual threat
thereof, referred to in paragraphs 2 and 3, is attributed, shall be
determined on the basis of a sharp and substantial increase in imports,
actual or imminent,
from such a Member or Members individually, and on the basis of the
level of imports as compared with imports from other sources, market
share, and import and domestic prices at a comparable stage of commercial
transaction; none of these factors, either alone or combined with
other factors, can necessarily give decisive guidance. Such safeguard
measure shall not be applied to the exports of any Member whose exports
of the particular product are already under restraint under this Agreement.
5. The period of validity
of a determination of serious damage or actual threat thereof for
the purpose of invoking safeguard action shall not exceed 90 days
from the date of initial notification as set forth in paragraph 7.
6. In the application of the transitional safeguard, particular account shall be taken of the interests of exporting Members as set out below:
(a) least-developed country Members shall be accorded treatment significantly more favourable than that provided to the other groups of Members referred to in this paragraph, preferably in all its elements but, at least, on overall terms;
(b) Members whose total volume of textile and clothing exports is small in comparison with the total volume of exports of other Members and who account for only a small percentage of total imports of that product into the importing Member shall be accorded differential and more favourable treatment in the fixing of the economic terms provided in paragraphs 8, 13 and 14. For those suppliers, due account will be taken, pursuant to paragraphs 2 and 3 of Article 1, of the future possibilities for the development of their trade and the need to allow commercial quantities of imports from them;
(c) with respect to wool products from wool-producing developing country Members whose economy and textiles and clothing trade are dependent on the wool sector, whose total textile and clothing exports consist almost exclusively of wool products, and whose volume of textiles and clothing trade is comparatively small in the markets of the importing Members, special consideration shall be given to the export needs of such Members when considering quota levels, growth rates and flexibility;
(d) more favourable treatment shall be accorded to re-imports by a Member of textile and clothing products which that Member has exported to another Member for processing and subsequent reimportation, as defined by the laws and practices of the importing Member, and subject to satisfactory control and certification procedures, when these products are imported from a Member for which this type of trade represents a significant proportion of its total exports of textiles and clothing.
7. The Member proposing
to take safeguard action shall seek consultations with the Member
or Members which would be affected by such action. The request for
consultations shall be accompanied by specific and relevant factual
information, as up-to-date as possible, particularly in regard to:
(a) the factors, referred to in paragraph 3, on which the Member
invoking the action has based its determination of the existence of
serious damage or actual threat thereof; and (b) the factors,
referred to in paragraph 4, on the basis of which it proposes to invoke
the safeguard action with respect to the Member or Members concerned.
In respect of requests made under this paragraph, the information
shall be related, as closely as possible, to identifiable segments
of production and to the reference period set out in paragraph 8.
The Member invoking the action shall also indicate the specific level
at which imports of the product in question from the Member or Members
concerned are proposed to be restrained; such level shall not be lower
than the level referred to in paragraph 8. The Member seeking consultations
shall, at the same time, communicate to the Chairman of the TMB the
request for consultations, including all the relevant factual data
outlined in paragraphs 3 and 4, together with the proposed restraint
level. The Chairman shall inform the members of the TMB of the request
for consultations, indicating the requesting Member, the product in
question and the Member having received the request. The Member or
Members concerned shall respond to this request promptly and the consultations
shall be held without delay and normally be completed within 60 days
of the date on which the request was received.
8. If, in the consultations,
there is mutual understanding that the situation calls for restraint
on the exports of the particular product from the Member or Members
concerned, the level of such restraint shall be fixed at a level not
lower than the actual level of exports or imports from the Member
concerned during the 12-month period terminating two months preceding
the month in which the request for consultation was made.
9. Details of the agreed
restraint measure shall be communicated to the TMB within 60 days
from the date of conclusion of the agreement. The TMB shall determine
whether the agreement is justified in accordance with the provisions
of this Article. In order to make its determination, the TMB shall
have available to it the factual data provided to the Chairman of
the TMB, referred to in paragraph 7, as well as any other relevant
information provided by the Members concerned. The TMB may make such
recommendations as it deems appropriate to the Members concerned.
10. If, however, after the expiry of
the period of 60 days from the date on which the request for consultations
was received, there has been no agreement between the Members, the
Member which proposed to take safeguard action may apply the restraint
by date of import or date of export, in accordance with the provisions
of this Article, within 30 days following the 60-day period for consultations,
and at the same time refer the matter to the TMB. It shall be open
to either Member to refer the matter to the TMB before the expiry
of the period of 60 days. In either case, the TMB shall promptly conduct
an examination of the matter, including the determination of serious
damage, or actual threat thereof, and its causes, and make appropriate
recommendations to the Members concerned within 30 days. In order
to conduct such examination, the TMB shall have available to it the
factual data provided to the Chairman of the TMB, referred to in paragraph
7, as well as any other relevant information provided by the Members
11. In highly unusual and critical
circumstances, where delay would cause damage which would be difficult
to repair, action under paragraph 10 may be taken provisionally on
the condition that the request for consultations and notification
to the TMB shall be effected within no more than five working days
after taking the action. In the case that consultations do not produce
agreement, the TMB shall be notified at the conclusion of consultations,
but in any case no later than 60 days from the date of the implementation
of the action. The TMB shall promptly conduct an examination of the
matter, and make appropriate recommendations to the Members concerned
within 30 days. In the case that consultations do produce agreement,
Members shall notify the TMB upon conclusion but, in any case, no
later than 90 days from the date of the implementation of the action.
The TMB may make such recommendations as it deems appropriate to the
12. A Member may maintain measures
invoked pursuant to the provisions of this Article: (a) for
up to three years without extension, or (b) until the product
is integrated into GATT 1994, whichever comes first.
13. Should the restraint measure remain
in force for a period exceeding one year, the level for subsequent
years shall be the level specified for the first year increased by
a growth rate of not less than 6 per cent per annum, unless otherwise
justified to the TMB. The restraint level for the product concerned
may be exceeded in either year of any two subsequent years by carry
forward and/or carryover of 10 per cent of which carry forward shall
not represent more than 5 per cent. No quantitative limits shall be
placed on the combined use of carryover, carry forward and the provision
of paragraph 14.
14. When more than one product from
another Member is placed under restraint under this Article by a Member,
the level of restraint agreed, pursuant to the provisions of this
Article, for each of these products may be exceeded by 7 per cent,
provided that the total exports subject to restraint do not exceed
the total of the levels for all products so restrained under this
Article, on the basis of agreed common units. Where the periods of
application of restraints of these products do not coincide with each
other, this provision shall be applied to any overlapping period on
a pro rata basis.
15. If a safeguard action is applied
under this Article to a product for which a restraint was previously
in place under the MFA during the 12-month period prior to the entry
into force of the WTO Agreement, or pursuant to the provisions of
the level of the new restraint shall be the level provided for in
paragraph 8 unless the new restraint comes into force within one year
(a) the date of notification referred to in paragraph 15 of Article 2 for the elimination of the previous restraint; or
(b) the date of removal of the previous restraint put in place pursuant to the provisions of this Article or of the MFA
which case the level shall not be less than the higher of (i)
the level of restraint for the last 12-month period during which the
product was under restraint, or (ii) the level of restraint
provided for in paragraph 8.
16. When a Member which is not maintaining
a restraint under Article 2 decides to apply a restraint pursuant
to the provisions of this Article, it shall establish appropriate
arrangements which: (a) take full account of such factors as
established tariff classification and quantitative units based on
normal commercial practices in export and import transactions, both
as regards fibre composition and in terms of competing for the same
segment of its domestic market, and (b) avoid over-categorization.
The request for consultations referred to in paragraphs 7 or 11 shall
include full information on such arrangements.
1. As part of the integration process and with reference to the specific commitments undertaken by the Members as a result of the Uruguay Round, all Members shall take such actions as may be necessary to abide by GATT 1994 rules and disciplines so as to:
(a) achieve improved access to markets for textile and clothing products through such measures as tariff reductions and bindings, reduction or elimination of non-tariff barriers, and facilitation of customs, administrative and licensing formalities;
(b) ensure the application of policies relating to fair and equitable trading conditions as regards textiles and clothing in such areas as dumping and anti-dumping rules and procedures, subsidies and countervailing measures, and protection of intellectual property rights; and
(c) avoid discrimination against imports in the textiles and clothing sector when taking measures for general trade policy reasons.
actions shall be without prejudice to the rights and obligations of
Members under GATT 1994.
shall notify to the TMB the actions referred to in paragraph 1 which
have a bearing on the implementation of this Agreement. To the extent
that these have been notified to other WTO bodies, a summary, with
reference to the original notification, shall be sufficient to fulfil
the requirements under this paragraph. It shall be open to any Member
to make reverse notifications to the TMB.
3. Where any Member considers
that another Member has not taken the actions referred to in paragraph
1, and that the balance of rights and obligations under this Agreement
has been upset, that Member may bring the matter before the relevant
WTO bodies and inform the TMB. Any subsequent findings or conclusions
by the WTO bodies concerned shall form a part of the TMB’s comprehensive
1. In order to supervise
the implementation of this Agreement, to examine all measures taken
under this Agreement and their conformity therewith, and to take the
actions specifically required of it by this Agreement, the Textiles
Monitoring Body (“TMB”) is hereby established. The TMB shall consist
of a Chairman and 10 members. Its membership shall be balanced and
broadly representative of the Members and shall provide for rotation
of its members at appropriate intervals. The members shall be appointed
by Members designated by the Council for Trade in Goods to serve on
the TMB, discharging their function on an ad personam basis.
2. The TMB shall develop
its own working procedures. It is understood, however, that consensus
within the TMB does not require the assent or concurrence of members
appointed by Members involved in an unresolved issue under review
by the TMB.
3. The TMB shall be considered
as a standing body and shall meet as necessary to carry out the functions
required of it under this Agreement. It shall rely on notifications
and information supplied by the Members under the relevant Articles
of this Agreement, supplemented by any additional information or necessary
details they may submit or it may decide to seek from them. It may
also rely on notifications to and reports from other WTO bodies and
from such other sources as it may deem appropriate.
shall afford to each other adequate opportunity for consultations
with respect to any matters affecting the operation of this Agreement.
5. In the absence of any
mutually agreed solution in the bilateral consultations provided for
in this Agreement, the TMB shall, at the request of either Member,
and following a thorough and prompt consideration of the matter, make
recommendations to the Members concerned.
6. At the request of any
Member, the TMB shall review promptly any particular matter which
that Member considers to be detrimental to its interests under this
Agreement and where consultations between it and the Member or Members
concerned have failed to produce a mutually satisfactory solution.
On such matters, the TMB may make such observations as it deems appropriate
to the Members concerned and for the purposes of the review provided
for in paragraph 11.
7. Before formulating
its recommendations or observations, the TMB shall invite participation
of such Members as may be directly affected by the matter in question.
the TMB is called upon to make recommendations or findings, it shall
do so, preferably within a period of 30 days, unless a different time
period is specified in this Agreement. All such recommendations or
findings shall be communicated to the Members directly concerned.
All such recommendations or findings shall also be communicated to
the Council for Trade in Goods for its information.
9. The Members shall endeavour
to accept in full the recommendations of the TMB, which shall exercise
proper surveillance of the implementation of such recommendations.
10. If a Member considers itself unable
to conform with the recommendations of the TMB, it shall provide the
TMB with the reasons therefor not later than one month after receipt
of such recommendations. Following thorough consideration of the reasons
given, the TMB shall issue any further recommendations it considers
appropriate forthwith. If, after such further recommendations, the
matter remains unresolved, either Member may bring the matter before
the Dispute Settlement Body and invoke paragraph 2 of
Article XXIII of GATT 1994 and the relevant provisions of the
Dispute Settlement Understanding.
11. In order to oversee the implementation
of this Agreement, the Council for Trade in Goods shall conduct a
major review before the end of each stage of the integration process.
To assist in this review, the TMB shall, at least five months before
the end of each stage, transmit to the Council for Trade in Goods
a comprehensive report on the implementation of this Agreement during
the stage under review, in particular in matters with regard to the
integration process, the application of the transitional safeguard
mechanism, and relating to the application of GATT 1994 rules and
disciplines as defined in Articles
7 respectively. The TMB’s
comprehensive report may include any recommendation as deemed appropriate
by the TMB to the Council for Trade in Goods.
12. In the light of its review the
Council for Trade in Goods shall by consensus take such decisions
as it deems appropriate to ensure that the balance of rights and obligations
embodied in this Agreement is not being impaired. For the resolution
of any disputes that may arise with respect to matters referred to
Article 7, the Dispute Settlement
Body may authorize, without prejudice to the final date set out under
Article 9, an adjustment to
paragraph 14 of
Article 2, for
the stage subsequent to the review, with respect to any Member found
not to be complying with its obligations under this Agreement.
This Agreement and all restrictions thereunder shall stand
terminated on the first day of the 121st month that the WTO Agreement
is in effect, on which date the textiles and clothing sector shall
be fully integrated into GATT 1994. There shall be no extension of
OF PRODUCTS COVERED BY THIS AGREEMENT
1. This Annex lists textile and clothing products defined by Harmonized Commodity Description and Coding System (HS) codes at the six-digit level.
[Not included here.]
2. Actions under the safeguard
Article 6 will
be taken with respect to particular textile and clothing products
and not on the basis of the HS lines per se.
3. Actions under the safeguard provisions in Article 6 of this Agreement shall not apply to:
(a) developing country Members’ exports of handloom fabrics of the cottage industry, or hand-made cottage industry products made of such handloom fabrics, or traditional folklore handicraft textile and clothing products, provided that such products are properly certified under arrangements established between the Members concerned;
(b) historically traded textile products which were internationally traded in commercially significant quantities prior to 1982, such as bags, sacks, carpetbacking, cordage, luggage, mats, mattings and carpets typically made from fibres such as jute, coir, sisal, abaca, maguey and henequen;
(c) products made of pure silk.