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;
Hereby agree as
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 1994.
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
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
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 concerned.
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:
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;
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:
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;
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;
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:
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;
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 Members.
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
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 Member
under 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. 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 Article
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
on textile and clothing products (other than restrictions maintained under
the MFA and covered by the provisions of Article 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.
maintaining restrictions falling under paragraph 1, except those justified
under a GATT 1994 provision, shall either:
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
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 WTO
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 Article 6, 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 6.
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 Article
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 from circumvention.
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
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 Article
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:
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;
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;
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;
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 concerned.
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 Members concerned.
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. 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 Article 2
or 6, 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 of:
the date of notification referred to in paragraph 15 of Article 2
for the elimination of the previous restraint; or
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
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:
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;
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;
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
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
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
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 2, 3,
6 and 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 in 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 this Agreement.
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 provisions in 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:
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;
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
products made of pure silk.
 To the extent possible, exports from a least-developed country Member may also benefit from this provision.
 The “agreement year” is defined to mean a 12-month period beginning from the date of entry into force of the WTO Agreement and at the subsequent 12-month intervals.
Restrictions denote all unilateral quantitative restrictions,
bilateral arrangements and other measures having a similar effect.
 A customs union may apply a safeguard measure as a single unit or on behalf of a member State. When a customs union applies a safeguard measure as a single unit, all the requirements for the determination of serious damage or actual threat thereof under this Agreement shall be based on the conditions existing in the customs union as a whole. When a safeguard measure is applied on behalf of a member State, all the requirements for the determination of serious damage, or actual threat thereof, shall be based on the conditions existing in that member State and the measure shall be limited to that member State.
 Such an imminent increase shall be a measurable one and shall not be determined to exist on the basis of allegation, conjecture or mere possibility arising, for example, from the existence of production capacity in the exporting Members.