title: RECOMMENDATION FOR A REGULATION (EEC) OF THE COUNCIL concluding on behalf of the European Economic Community the Arrangement regarding International Trade in Textiles (submitted to the Council by the Commission)

text:
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COM (74) 251
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                                                           COM(74)251 final
                                                           Brussels , 26 February 1974
                               RECOMMENDATION FOR A
                        REGULATION ( EEC ) OF THE COUNCIL
            concluding on behalf of the European Economic Community
           the  Arrangement regarding International Trade in Textiles
                  ( submitted to the Counoil "by the Commission)
      COM(74) 251 final
 ---pagebreak---                        3XFHHATCHÏ ST . 3 V . JÏÏT.
Following discussions in the GATT Working Party on trade in textiles M
which the Community participated fror; 7 June 1972 until J>0 July 1973 j
the GATT Council decided on 30 July 1973 to reconstitute the Working
Party into a Negotiating Group with the aim of reaching a satisfactory
arrangement on trade in textiles by 31 December 1973 1 at which date the
Long-Term Arrangement on Cotton Textiles , to which the Community was a
party? was due to expire * The Negotiating Group held meetings under
the chairmanship of the Director General of GATT in Geneva , in October ,
November and December 1973 * Negotiations were completed on 20 December
and the text of an Arrangement regarding International Trade in Textile
was thereupon   communicated to the Contracting Parties .
On 6 November 1973 the Council authorised the Commission , on the basis
of Article 113 » to participate in the negotiations on behalf of the
Community . The Commission performed this task following directives
laid dov/n by the Council . Throughout the negotiations , the Commission
acted in consultation with the special committee appointed by the Counc
under Article 113 »
The Arrangement provides that it shall remain in force for four years .
It was designed to meet the needs of both importing and exporting
countries in the field of textiles . The basic objectives of the Arrange
ment are to achieve the expansion of trade , the reduction of barriers t
such trade and the progressive liberalisation of _ world trade in textile
products , whilst at the same time ensuring the orderly and equitable
development of this trade and the avoidance of market disruption . It
was felt that the special problems which tend to exist, in this sector
particularly concerning quantitative restrictions on trade in textiles ,
justified treatment apart from the generality of world trade problems
in other industrial sectors . Emphasis is centred ,. therefore , in the
Arrangement , on the treatment of quantitative restrictions and pro
 ---pagebreak---                                   - 2 -
    vision is made for the staged elimination of existing restrictions }
    for the conclusion of bilateral agreements and for the selective
    application of safeguards ( in contrast to the general non-dis-
    criminatory safeguards provision in the GATT itself ).
    In many ways the negotiations for this Arrangement were seen as
    helping to prepare for the forthcoming multilateral trade negotiations
    and , consequently , successful entry into force and operation of the
    Arran ement will facilitate progress in the wider trade negotiations
    which have already commenced .
    The principal provisions of the Arrangement reflect , to a substantial
  • extent , Community objectives and , in many cases , appear in the form in
    which they were put forward by, the Community . Such is substantially
    the case with Art . 2 which provides for the treatment of existing
    quantitative restrictions . These are         szi .• :         •' " " ' -'o
    either to be eliminated , unless they are " justified " by reference
    to the Arrangement 's safeguard provision , or are to be included in a
    programme of liberalisation which would take into account bilateral
    agreements which have been concluded or are being negotiated . Such
    bilateral agreements are specifically envisaged in Article 4 of the
    Arrangement and constitute an important element in the overall process
    of progressive and orderly liberalisation of trade in the textiles
    sector . Implementation of .this Article should lead , during the
    currency of the Arrangement , to a greater liberalisation of world
    trade in textiles through the progressive removal of unnecessary
    barriers to this trade .
5 . Similarly , Art . 3 which , with Annex . A , lays down conditions and
    criteria for recourse to safeguard measures , is .consistent with the
    Community 's negotiating aims . Nothing in the Arrangement prevents
    the Community from . applying safeguard measures to forestall or remedy
    serious damage to domestic; producers whether this exists ticiroughout
    the Community or only within one or more regions of the Community .
    In this respect it is important to recall that the Community has ,
    for example , had recourse to measures under Art . XIX of the GATT in
 ---pagebreak---                                       - 3 -
      respect of serious injury to regional industry , which, have been
      limited to the regions of the Community concerned . Such measures are
      expressly provided for under existing Community regulations .
6 , Art . k provides , in conformity with the Community 's objectives ,
      framework rules for bilateral textiles agreements . In terms of
      product coverage , the present Arrangement greatly extends the scope
      of the former Long-Term Arrangement. Not only cotton products are
      covered but also those made of wool , man-made fibres , as well as
      artificial and synthetic fibres , or blends thereof . Finally , the 1
      Arrangement provides for the establishment of two bodies - a Textiles
      Committee ,., the composition and function of which are set out in
      Art . 10 , and a Textiles Surveillance Body described in Art .      In sum ,
      the provisions of the Arrangement should provide a basis of industrial
      and commercial confidence , so that an ordered liberalisation of
      world textiles trade can be achieved .
7 • The Arrangement thus relates to international trade in textiles and ,
      in particular , to the conditions under which such trade is to be
      liberalised and restrained . Accordingly , it falls within- the
    i common commercial ; policy of the -Community and , having been negotiated
      by the Commission on the basis of Article 113 is , by virtue of Article It
      to be concluded by the Council on behalf of the Community .
8 . The Arrangement falls within the framework of the GATT , but exists as
      an instrument distinct from the General Agreement . There are , never
      theless , throughout the Arrangement , both substantive and structural
      links with the General Agreement itself . Furthermore j the provisions
      of the Arrangement will not affect the rights and obligations of the
      Community under the GATT and do' not conflict with any obligations ,
      either of the Community or of Member States , under any other inter
      national instruments . In particular , the special rights enjoyed at presen
      by the Community vis - a-vis certain countries by virtue of their Pro
      tocols of Accession to the GATT are specifically preserved .
 ---pagebreak---  9 . No changes appear to be required in the existing provisions of
      Community law in order to enable the Community to accept the Arrangement e
      In any recourse to measures provided for under Community law , Member
      States are formally bound by the provisions of the Arrangement through
      Art . 228 ( 2 ) of the Treaty , Thus when safeguard action is taken by a
      Member State under Community - law , such measures must conform to the
      provisions of the Arrangement . It is appropriate that the inter
      national responsibility for the consequences of the exercise of such
      rights should be borne , so' far as our trading partners under the
      Arrangement are concerned , by the Community itself . To confirm this ,
      it would be appropriate for an insertion                o
      to be made in the Council 's minutes in the following terms ;
           "The acceptance by the European Economic Community of the
           " Arrangement regarding International Trade in Textiles engages
           " the responsibility of the Community in the implementation of _
           " its provisions . As in the past , the Community will in appropriate
           " circumstances continue to apply , or authorise its Member States to
           "apply , in accordance both with Community law - and with the •
           " provisions of the Arrangement regarding International Trade in
           " Textiles , safeguard measures on a national or regional basis".
      The Commission would give such explanations to third countries in this
      sense as might " be necessary .
10 .. Finally , it should be noted that acceptance of the Arrangement will in
      no way obstruct or deflect progress towards implementation of a common
      Community import policy for textiles , on the basis of guidelines indi
      cated by the Commission in its memorandum to the Council of 30 October
      1973 . Rather , the Arrangement should assist its achievement through the
      creation of conditions necessary for the ordered liberalisation of
      international trade in textiles subject to satisfactory safeguard
      conditions and the conclusion of mutually acceptable lilateral agreement
      as authorised by the Arrangement .
 ---pagebreak---                                   - 5 -
11 , Taking into account the considerations set out above , the Commission
      believes that the Arrangement which has been negotiated , consistently
      with the directives laid down by the Council , meets all of the
      Community 's essential objectives and that it is in the interests of
      the Community to accept the Arrangement regarding International
      Trade in Textiles before 26 March 197^^^* The Commission , therefore ,
      recommends to the Council that the procedures necessary for the
      signing and conclusion of the Arrangement by the Community be
      engaged . To this end the Commission presents herewith a proposal
      for a Council Regulation concluding the Arrangement and designating
      the person empowered to sign it on behalf of the Community , as well
      as the texts of the Arrangement .
( 1 ) Date agreed for the first meeting of the Textiles Committee ,
 ---pagebreak---                          Recommendation for a
                       Regulation ( EEC ) of the Council
                       concluding on behalf of the
                       European Economic Community the
                       Arrangement regarding International
                         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 Commission has participated , on behalf of the Community ,
in the negotiations within the framework of a Negotiating Group on
Textiles established by the G. iTT. Council , which have led to the
drawing up of an Arrangement regarding International Trade: In Textiles ;
Whereas it is desirable that :the Community; concludes and accepts the
Arrangement-
 ---pagebreak--- HAS ADOPTED THIS REGULATION ;•
                               Article 1
The Arrangement regarding International Trade in Textiles is hereby-
concluded on behalf of the European Community . The texts of the
Arrangement are set out in the Annex to this Regulation .
                               Article 2
The President of the Council shall be authorised to designate the
person empowered to sign the Arrangement in accordance with Article 13
of the Arrangement and to confer upon him the necessary powers to act
on behalf of the Community .
                               Article 3
This Regulation shall enter > into force on the third day following its
publication in the Official Journal of the European Communities .
This Regulation shall be binding in its entirety and directly applicable
in all member States .                                    *"
Done at Brussels
                                               For the Council
 ---pagebreak---      No . 2<J . St. .
              G
  GENERAL AGREEAAENT . ON                                             20 Dece~.cer 1Ç73
 TARIFES AND TRADE                                                    XiXiiix ccíd Dxs 1 cvz va.on
                               KEGOTIATI'TG GROUP Q;T TEXTILES
                           Rencrt to the Council " by the Chairr.en
1.    At its meeting cn 30 July 1973 the Council decided that the \.:orking Party cn
Textiles be reconstituted into a negotiating group with the objective , taking into
account the 'Jerking Party 's reports and its ir.anclate of 33 April 1973 , of reaching a
nutually satisfactory arrangement or trade in textiles by the end of 1973 - The
i'?ogotiatir.g Group v;as to report the terns' of the new arrangement to the Council by
31 Decei.iVer 1973 .                             .                  '
2.    The Negotiating Group has completed the task assigned to it by the       the Council
                                                                                Council and
an Arrangement Regarding International Trade in Textiles , as agreed ueon      upon by the
Negotiating Group , is attached .
                                                                      o
        O
 ---pagebreak---     GENERAL AGREEMENT ON                                                    '    TEX.NG/l
                                                                                20 December 1973
    TARIFES AND TRADE                                                            General Distribution
                                                                                • ;
                                 A oRANGE-TENT REGARDING IHTEHFTATIONAL
                                            TiiADs* in" mmiis
                                                  PREAMBLE
                          the great importance of production and trade in textile products
   of wool , Mtn-uadc fibres and cotton for the economies of iaeny. countries , find their
. particular importance for the economic find social development of developing countries
   and for the . expansion and diversification of their , export earnings , and conscious
   also of the. special importance of trade in textile products of cotton for many
   developing countries ;                             »                   .   •        .. .     •
*                                                                                '      *•
                          father the tendency for an unsatisfactory situation to exist in
   vorld trade in textile products and that this situation , if not satisfactorily dealt
   with , could work to the detriment of countries participating in trade-in textile
   products , whether as importers or exporters , or both , adversely affect prospects for
   international co-operation in the trade field, and have unfortunate repercussions on
   trade relations generally :                                        ' •
                                                                                o
         iiSiP-.DII ohat this unsatisfactory situation .is characterized by the proliferation
  of restrictive measures , inclining dis ci^irdn atory Measures , that are inconsistent with
  the prii^r: i.ples of the General .Agreement on Tariffs cuid Trade and also that , in some
  importing countries , situations have arisen which , in tho view of these, countries,
  ca^se-.or threaten to cause disruption of their domestic markets;                                 • •
         pesir;i nr? to take co-operative and constructive action , within a multilateral
  framework, so as to deal with tho situation in such a way as to promote on a sound
  basis the development of production and expansion of trade in textile products and
  progressively to achieve the reduction of trade barriers and' the liberalization of
  vorld trade in these products ;
                         that , in pursuit of such action , the volatile and continually
  evolving nature of production and trade in textile products should be constantly
 borne in mind and tho fullest account talcen of such serious economic, and social
 problems as exist in this field in both importing and exporting countries , and
particularly in tho developing countries :
 ---pagebreak---     TDX.ifG/i
    Page 2
                   r
          R eco gni *z;i ng further th?.t such action should be designed to facilitate
    economic expansion and to promote the development of developing countries
    possessing the necessary resources , such as materials and teclmical skills , by
    providing larger opportunities for such countries , including-; countries that are ,
    or that may shortly become , now entrants in the field of textile exports to
   increase their exchange earnings from the sale in world markets of products which
   they can efficiently produce ;                          • ■
          Recognising that £ut\ire barr.onious development of trade in textiles
   particularly having regard to the ne.eds of developing countries , also depends
   importantly upon waiters outs id a the scope of this Arrangement , and that such
   factors in this respect include progress loading both to the reduction of tariffs
   and to the maintenance ana improvement of scrhen^s of generalized preferences , in
   accordance with the .Tokyo Declaration :                          '          ■ .• ■        • .       '
                                                                • .         * "        *            *
        - Poter^ined to have full regard to tha principal as and objectives of the
   General Agreement 'on Tariffs and Trade ( hereinafter referred to as the GATT ) and ,
   in carrying out the aims' of this Arrangement , effectively to implement the
■ principles and objectives agreed upon in the Tokyo Declaration of ^inis'tcrs dated ■
   3/. September 1973 concerning the Multilateral Trade negotiations j
          TH3 PAR'JIIiiS TO THIS *JUltA.i{G2£; :32p have agreed as follows :
                                       :    .   Article 3   ■ '
     ;     ....           #               .   .
  3L .    It Kay be desirable during tha next few years for special practical measures
  of international co-opcration to be applied by the participating countries^ in the
  field of textiles with the aim of eliminating the difficulties that exist in this
  field .                                                                •'          '   . •    •" • ••
  2 . = The basic objectives shall be to achieve tha expansion of trade , the
  reduction ox barriers to such trade and the progressive liberalization of world
  trade in textile products , while at the same time ensuring the orderly and
  equitable development of this trade and avoidance of disruptive effects in ....
  individual markets and on individual lines of production in both importing and
  exporting countries .          In the case of those countries having small markets , an
  exceptionally high level of imports and a correspondingly low level of domestic
 production , account should be taken of the avoidance of damage to those coxa:tries'
 minimum viable production, of textiles .
 3 . A principal aim in the implementation of this Arrangement shall be to further
 the economic end social development of developing countries and secure a sub
 stantial increase in their export earnings from textile products and to provide
 scope for a greater share: for them in world trade in these products .                    ••
         "The expressions " participating country ", " participating exporting country "
 tuid " participating .impor l.ing country ", wherever thvy appear in this Arrangement ,
 shall be deemed to include the European Economic Community .
 ---pagebreak---                                                                                TEX.NQ/I
                                                                                Pane 3
            . Aotiona takon unci as? this ArirancKaant , eh»3.3. not iat©rru;3"c or dleoourr.g® ths
     • autonomous indite trial adjustment processes of participating countries . I'lirther-
      morCj actions taken under this /arrangement should be accompanied by the pursuit of
 .• appropriate; economic and social policies , in a manner consistent v/ith national
       laws and systems , required by changes in' the pattern of trade in textiles and in
       the comparative advantage of participating countries , which policies would
       encourage businesses which are less coj.ipetit.ive internationally to novo progressively
      into r.ore viable lines of production or into other sectors of the economy and
• provide increased access to their markets for textile products from developing
      countries .                              •
      5.   . The application of safeguard measures under this Arrangement , subject to
      recognized conditions and criteria and under the siu-yeillar.ee of an international
      body set up for that purpose , and in . conformity vith the principles and objectives
      of. this Arrangement , may in exceptional circumstances become necessary in the
     field of trade in textile products , and should assist any process of adjustment
     which would be required by the changes in the pattern of world trade in textile
     products . The parties to this Arrangement undertake - not to apply such measures
     except in accordance with the provisions of this Arrangement with full . regard to
     the impact of such measures on other parties .                                              -
     6 . ' The provisions of this Arrangement shall not affect the rights and obligations
     of the participating countries under the C-ATT .
     7.'     The participating countries recognize that , since rxasurcs taken under this
    Arrangement are intended to deal with the special problems of textile products ,
     such measures should be considered as exceptional , and not lending themselves to
    application in other fields .
                         •'                  Article 2                                    • ■
    .1 .     All existing unilateral quantitative restrictions , bilateral agreements and
    any other quantitative measures In force which have a restrictive effect shall be
    notified in detail by the restraining participating country, upon acceptance of or
    accession to this Arrangement , to the Textiles Surveillance Body, which shall
    circulate the notifications to- the other participating countries               for thenr
    information., Measures or agreements which arc not notified by a                participating
 . country within sixty days of its accop.te.nce of , or accession to ,             this Arrangement
  . shall be considered to bo contrary to this Arrangement and " shall              be ter^iinated
    forthwith .     •                                     • ■  '                                   . .
 ---pagebreak---    TEX.KG/1
   Page 4
    2.            Unless they are justified under tha previsions of the G/.TT ( including its
   •Arincxen wacl • Protocols ) , ''all unilateral quantitative restrictions ' arid any .ether
 ' quantitative measures which have a restrictive effect ar.d which are notified ,
    in'- accordance with paragraph 1 above shall be' terminated within one year cf the
    entry into force -of thin Arrangement , unless " they 'are the subject of one cf the-,
  - following procedures to bring then into conformity,with 'th'o provisions of this
    Arrangement: •,                 •'                              .,7             . -J. . • '•
                  ( i ) ''inclusion in -a programme , which should be . adopted and notified to the
      ■ ' • ••• Textiles Surveillance Body within :c-ne year from' the date of ' coning into .'
                  force of this Arrangement , designed to eliminate existing restrictions in
                  stages within a maximum period of . three years from the entry into force cf
         '        this' Arrangement and talcing account' of any bilateral agreement either .
               '. concluded or in course of being, negotiated as prodded for in. ( ii ) below ;
:         ■ --it being understood that a maj or ^effort will 'be 'made in. the first year,'
       ;'V :% covering both a substantial elimination of restrictions and a " substantial
        '•' •". increase in the regaining quotas;' ' '        s.     •      •
                             .....         .                                     | ' _
    •             ( ii ) inclusion / within a. period of one year from the entry into force of
       " ' • "this Arrangement , 'in bilateral agreements' negotiated , or in . course cf
                  negotiation, pursuant to the previsions of Article 4 J if,' for exceptional
                  reasons , any such bilateral agreement is not concluded within the period
"..-.•• of one year,' this period, following'' consultations' by the participating . •
                  countries concerned and with the concurrence of the Textiles Surveillance
                  Body, )::ay be extended by not more than c-no year ;
   »"•            (iii ) inclusion in agreements negotiated or measures', adopted, pursuant to.
 .         -; '"-the provisions of Article 3 .           "        '
   3 . Unless justified under the previsions of the GATT ( including its Annexes
   raid Protocols ), all existing bilateral -agreements notified in accordance with
   paragraph 1 of this Article shall , within. one year of. th ,-. entry into force of
   this Arrangement , either be terminated cr justified, under . the provisions of this-
  Arrangement 'oi* modified to conform .'therewith . ■ '                '     ..
  4 . • For the purposes' of paragraphs 2 and 3 above the participating countries
   shall' afford full opportunity for bilateral consultation' and . negotiation aimed ■
  at - arriving at -Mutually •acceptable solutions in' accordance with Articles . 3 ar.d 4 -
   or this Arrangement ana permittingfrcm the first year of the acceptance, of this
  Arrangement the elimination as complete as possible cf the existing restrictions .
  They shall report specifically to the Textiles Surveillance Body within cne year
  of the entry into force of this Arrangement cn the status of any such actions
  taken or negotiations undertaken pursuant to this Article .
 ---pagebreak---                                                                                T2X.!;C/1
                                                                                P;\gs . 5 •
    5.      The Textiles Surveillance Body shall complete its review of sucn reports
    within ninety days cf their receipt . In 'its review it shall con.-icUr whether all
    the actions taken are in conformity with this Arrangement . It :nay make • appropriate
    rccorcraendations to the participating, countries directly concerned so as to
   'facilitate the implementation of tJiis Article .
             .\ . .            "" .  ■     ^XticlO.         •.    •                ■
. 1 ." ' . Unless they are justified under the provisions of the C1ATT (including its
   Annexes and Protocols ) no new restrictions on trade in textile" precincts shall bo
  .introduced by participating countries, nor shall existing restrictions be intensified
   unless such action is justified under the provisions of this Article . -
               • •                     *           !
   2.      Ihe participating countries agree that this Article should only be resorted
   to sparingly and its application shell be limited to the precise products and to
   countries whoso exports of such products are causing market disruption as defined
  in Annex A taking full account cf the agreed principles and objectives set cut In
  this Arrangement and having full regard to the interests of both, importing and
  exporting countries . Participating countries shall take into account iv.p-cris frc;j
  all countries and shall seek to preserve a proper Measure of equity . They shall
  endeavour to avoid discriminatory measures where market disruption is caused by
  imports - from More than one participating country anc when resort to the application
  of this Article is unavoidable , bearing in ;;dnd the previsions of Article o .
  3.       If ,, in the opinion of "any participating importing country, " its market in
  towns of the definition of market disruption in Annex A is being disrupted by
  imports of a curtain textile product not already subject to restraint , it shall
  seek con saltations with the participating exporting country or countries concerned
  with a view to ror.oving such. .disruption . In its request the importing country
 i?;ay indicate the specific level at which it considers that exports of such products
  should be restrained , a level which .shall not be lower than the general level
 indurated i \ Annex 3 . The exporting country or countries concerned shall respond
 promptly to such request for consultations . ' The importing country 's request for
 consultations shall to accompanied by a detailed factual statement of the " reasons
 r.nd justification for the request , including the latest data concerning elements
 of market disruption , this information being coa-nuriicated at the sa.io tiae by the
 requesting country to the Chairman of the Textiles Surveillance Body .
 4.       If , in the consultation , there is mutual" underst aj)ding that the situation
 calls for restrictions on trade-in the ' textile product" concerned , "the level cf
restriction shall be fixed at -a level not .lower than the level indicated in
Annex i3 . Details of the .agreement reached shall be cc:nr.:unicated to the Textiles
Surveillance Body vjhich shall determine whether the " agreement is justified in .,
accordance with the provisions of this Arrangement .
 ---pagebreak---  ïsx.ift/i
  Page 6
 5.    ( ij If, however , aftftr a period of sixty days frc:r. tho date or. which' tho
      request has been received by the. participating exporting country or countries
       there has been no agreement either on tiics request for export restraint cr on
       any alternative solution , the requesting participating country may decline; xo
       accept imports for retention from the participating country or countries
      referred to in paragraph 3 above of the textiles and textile-, products
       causing market disruption ( as defined in Annex A ) at a level for the twelve
      month period beginning on the day when the- request was received by the
      participating exporting country or countries not less than the level'
      provided for in Annex B. Such level Kay be adjusted upwards to avoid undue
      hardship to the commercial participants in the trade involved to -the extent
      possible consistent with the purposes of this Article . At the sr."e tine
      the matter shall be brought for immediate attention to the Textiles
      Surveillance Body .             ...
       ( i.i ) 'However , it shall be open for either party to refer the natter to .the
      Textiles Surveillance Ecdy before the expiry of the period of sixty days .
       ( iii ) In either case the Textiles Surveillance Body shall promptly conduct
      the examination of the matter and make appropriate recommendations to the
      parties directly concerned within thirty days from the date on v;hich the
      matter is referred to it .       Such recommordati ons shall also be' forwarded to
      the Textiles Comrriit tee and to the GA'iT Council for their information . Upon '
      receipt of such recommendations the participating countries concerned sheuld
      review the measures taken or contemplated with regard to their institution ,
      continuation , modification or discontinuation .
6.    In highly unusual and critical circumstances , where imports of. ^ textile
product or products during the period of sixty days referred to in paragraph 5 .
above would cause serious market di eruption giving rise to damage difficult to
repair , the importing country shall request the exporting country concerned to
co-operate immediately on a bilateral emergency basis to avoid such damage , and •
shall , at trV:;- same tine , immediately communicate to the Textiles Surveillance
Body the full details of the situation . The countries concerned may jaako any
mutually acceptable interim arrangement they deem necessary to deal with the
situation wi thout prejudice to consultations regarding the natter under
paragraph 3 of this Article . In the event that such interim arrangement is net
reached, temporary restraint treasures nay be applied at a level higher than that
indicated in Annex B with a view , in particular , to avoiding undue hardship to
the conwercial participants in the trade involved . The importing country shall
give , except where possibility exists of quick delivery which would undermine
the purpose of such measure , at least one week 's prior notification of such
action to the participating exporting country or countries and enter into , or
continue, consultations under paragraph 3 of this Article . Vihen a measure is
taken under this paragraph either party may refer the mr.tter to the Textiles
 ---pagebreak---                                                                                ÏJJ X,KG/1
                                                                                Pane 7
    Svvrvoillanco Dody . The Textiles Surveillance Body filiall , conduct its work in tho
    wanner provided for in paragraph 'J above . Upon receipt of reeommc. 11 dat ion s from
: the Textiles Surveillance Body the participating importing country shall review
 ' the ■ measures taken , and report thereon to the Textiles Surveillance Body .
    7 . If recourse is had to    measures under this Article , participating countries .
    shall , in introducing such  measures , seek to avoid damage to the production and
    Marketing of the exporting   countries , and particularly of the developing
 . countries , and shall avoid   any such measures taking a form that could result in
    the establishment of additional non-tariff barriers to trade in textile products .
    They shall , through prompt consultations , provide for suitable procedures ,
    particularly as regards goods vhich have been , or vhich are about to be , shipped.'
    In the absence of agreement , the matter may be referred to. the Textiles
    Surveillance Body , vhich shall make the appropriate recommendations .
    8 . ' Measures taken under this Article may be introduced for limited periods not
    exceeding one year , subject to renewal or extension for additional periods of
   one year , provided that agreement is reached between the participating countries
   directly concerned on such renewal or , extension . In such cases the previsions
   of Annex B shall apply . Proposals for renewal or extension , . or modification or
   elimination or any disagreement thereon shall be submitted to the Textiles
   Surveillance Body , which shall make the appropriate recommendations . However ,
   bilateral restraint agreements under this Article may be concluded for periods
   .in excess of one year in accordance with the provisions of Annex B.
   9 - Participating countries shall keep under review any measures they have taken
  under this Article and shall afford any participating country or countries affected
  by such measures , adequate opportunity for consultation with a' view to the
  elimination of the measures as soon as possible . They shall0 report from tin-e to
  time , and in any case once a year , to the Textiles Surveillance Body on the progres
  made in the .elimination of such measures .
        Q                                       »
                                        Article                                   '
  1 . The participating countries shall fully bear in mind , in the conduct of their
  trade policies in the field of textiles , that they are , through the acceptance
  of, or accession to, this Arrangement , committed to a multilateral approach in. the
  search for solutions to the difficulties that arise in this field .                    -
  2 . However , participating countries may , consistently with . the basic objectives
  and principles of this Arrangement , conclude bilateral agreements on mutually
 acceptable terms in ordor, on the one hand, to eliminate real risks of market
 disruption ( as defined in Annex A) in importing countries and disruption to the
 textile trade of exporting countries , and on the other hand to ensure the expansion
 and orderly development of trade in textiles and the equitable treatment of
 participating countries .                     • :
 ---pagebreak--- ■-ÏEX . KG/1                                                       ?
   ï'à."0 8
   3.     Bilateral fcgrac&snta maintained under this article shall , on overr.ll terms ,
   ftnoluding can .-. ."Uvaio t; r/J f-rowth          ba norc liberal than raasurea provided
   for in Article 3 of this .-.rrangDment ; Such bilateral agreements shall be- designed
   und administered to facilitate the export in full of the levels , provided for under
   such agreements and shall include provisions assuring substantial flexibility for
   tho conduct of trade thereunder , consistent with the need fcr orderly expansion
   of such trade and conditions in ■£?.& domestic 'market of tho importing country
  concerned . Such provi.rj ons should encompass areas of bass level ?:, growth ,
  recognition of the increasing interchange-ability of natural , artifical and ",
  synthetic fibres, carry forward , carryover , transfers from one product grouping
  to another and such other arrangements , as may be mutually satisfactory to the
  parties - to such bilateral agreements ..
                                                                       *t *     .        –
  U-      The participating countries shall co"tunicate to tho Tortile s Surveillance
  Body full details of agreements entered into in terns of this Article v/ithin
  thirty days of their affective date . The Textiles Surveillance Body shall be
  inferred promptly when any such agreements are modified or discontinued . The
  Textiles Surveillance Body r.ay make such recommendations as it deems appropriate
  to the parties concerned .
                                             ;-.rtncle 5
          Restrictions on imports of textile products under the provisions of Article 3
  and shall bs administered in a flexible and equitable manner ard cvar-
  eategerization shall be avoided . Participating countries shall , in consultation ,
  provide for arrangements for the ad in. ni stratien. of the quotas and restraint levels ,
  including the proper arrangement for allocation of quotas among the exporters , in
  such a vay as to facilitate full utilization of such quotas . The participating
  importing country should tahe full account of such factors as established tariff
; classification and quantitative units based on normal corissrcial' practices in
  export and import transactions , both, as regards fibre composition and in terns of
  competing for the same segment of its . domestic mar.]; et .
                                             Article 6
  1 . Recognising the obligations of the participating countries to pay special
  attention to the needs pf the developing countries , it shall be considered
  appropriate and consistent v:ith equity obligations fcr those importing countries
  v.'hich apply restrictions under this Arrangement affecting the trade of developing
  countries to provide more favourable ter:.:s with regard to such restrictions ,
 including elements such as case level and growth rates , than for ether countries .
  In tho case of developing countries whoso exports are already' subject to
 restrictions an:' if the restrictions are Maintained under this Arrangement ,
 provisions should be made for higher quotas and liberal growth rates ,              it shall ,
 however , be borne in mind that there should bo. no "endue prejudice to the interests
 of established suppliers or serious distortion in existing patterns of trade .
 ---pagebreak---    2.     In recognition of the- need f or special treatment for exports of textile
   products fro:', developing countries , the criterion of past perforranco shall not
   ki i-.ppli.rjd in the c.Ktr.blir)i:-.c:;t of rjuotr.n .for th'ylv oxp'.irts 'of product:;) f'ro:v.
   textile sectors in respect" of whi ch they arc nov; entrants in the markets concerned
   and n higher growth rate sha.H bo accorded to such exports , having .in rind thvt
   this special treatment should not c.vuse undue prejudice to the interacts of
   established supplier fc or create ceriouc distortions in existing " patterns of trads .
  3.      Itor.traints on exports from participating countries whoso total volume of
  textile exports is ur.c-.li :Ln comparison vith the total volume of exports of
  other countries should ncrr.n-.lly be avoided if the exports fron; such c our. tries
 represent a small per centre of the total imports ,of textiles covered by this
  /uvrnngement of the importing country' concerned .               1                  ■
  /<..    Whore restriction .1; arc applied to trnde in cotton textiles in terms of -
  this Arrangement , npoci&l consideration will be 3 iron to the importance cf this
  trade to the developing coiuitries concerned in dovterinining the size of quotas
 and the growth element .                                 '          *
 'J .    Participating countries shall net , as far as possible,' maintain restraints
 on trade in textile products originating in other participating countries which
 are imported under a system of temporary importation for re-export after                             .
 processing , subject to a satisfactory system of control and certification . -
 6.       Consideration shall be given to special and differential treatment to
 re-imports into -a participating country of textile products which thst country
 has exported to another par ticipating country for processing and subsequent re-
 importation , in the light of the special nature of such trade without prejudice
 to the provisions of /article 3 .
       "                            .      I-rtic.13 7        '            .•
         jV:e participating countries shall tako stops to ensure , by the exchange
of i/m ornation , including statistics on impcr ts and exports when requested , and
by other practical moans , the effective operation of this Arrangement .
                                       -   Article 8
1.       The participating countries agree to avoid circumvention of this Arrangement
by trans-shipment , re - -routing , or action by non-parti cipari ts In particular ,
they agree - on the Measures provided for in this Article .                              • '
2.       The p-.irticipating countries agree to collaborate with a view to taking
appropriate administrative action to avoid such circumvention .                     Should any
participating country believe that the Arrangement is being circumvented end
that no appropriate administrative measures arc being applied to avoid such
 ---pagebreak---  TEX. î'G/1
 Page 10
 circumvention , thn.t country should consult v:itn the exporting country of origin
 and vith other countries involved in the circumvention with a view to seeking
 promptly a inutually satisfactory solution .    If sue): e. solution ds not reached
 the flatter shall bo referred to the Textiles Surveillance Sody .
 3.     Trie participating countries agree that if resort is had to the r.isasures
 envisaged in Articles 3        A , the participating importing country or countries
 concerned shall take steps to ensure that the par ti cipat ir.g country 's exports
against which such measurer, are taken shall not be restrained mere severely
 than the experts of siijdlar goods of an;/ country not porty to this Arrangement
which are causing , or acturJ.ly threatening , market disruption . The participating
importing country or countries concerned will give sympathetic consideration to
 any representations fr or. participating everting countries to the effect that
 this principle is not being adhered to or that the operation of this Arrangement
is frustrated by - trade with countries not . party to this Arrangement . If such
trade is frustrating the operation of this Arrangement, the participating
 countries shall consider taking such actions as r.ay be consistent v;ith their lav
to prevent such frustration .
/*.     The participating countries concerned shall cornmunicate to the Textiles
Surveillance Body full dtails of any measures or arrangements taken under this
Article or any disagreement and , when so requested , the Textiles Surveillance
Body shall , make reports of recommendations as appropriate .
                                    Article 9
1 . In view of the safeguard ^ provided for in this Arrangement the participating
countries shall , as far as possible , refrain from taking additional trade
measures which may have the effect of nullifying the objectives of this Arrangement
2.     If a participating country finds that its interests are being seriously
affected by any such measure taker, by another participating country, that ccur.try
rcay request, the country applying such measure to consult o'ith a view to ronedying
the situation .                                       .
3.     If the consultation fails to achieve a mutually satisfactory solution
within a period of sixty days the requesting participating country nay refer the
matter to the Textile-.} Surveillance Body which shall promptly discuss such matter ,
the participating country concerned being free to refer the natter to that body
before the expiry of the period of sixty days if it considers that there-, arc
justifiable grounds for so doing . The . Textiles Surveillance Sody shall make
such reccr.E3or.d&tions to the partici mating countries as it considers appropriate.'
                                    Article 10
1.     There is established within the framework of GATT a Textiles Committee
consisting of representatives of the per ties to this Arrangement . The Committee
shall carry out the responsibilities ascribed to it under this Arrangement.
 ---pagebreak---                                                                                ΤΓ,Χ.ΝΟ/1
                                                                                Ρα£ ε 11
       2.      The Co}:X:5 tteu shall ueet from tii-o to viir.e and <;t loru-:t once n year to dis-
       ch:-.rtf« itfi f-.inotili.cn rt fttt'J ts doril witH tHofoO h&ttnvrt KpftQificSrD.Il ;/ referred ta it
 ' by the 'i'«x!tilcs Surveillance Body .                 It- shs.ll prepare such studiaa 'c.fi the
      participating countries :X.y decide .                It shall undertake an analysis of the
      current, state of world production and trade: in textile pr -ducts , including any
      uea euros' to facilitate adjustment and it shall present its views regarding r..oa:is
      of furthering the expansion and liberalisation .;f trade in textile products . It
    'will collect the ois.bisiical nhd other .information necessary for the discharge of
      its functions arid vi.l.'L be empowered to request the participating countries to
 '' furnish suoh information .                  .       .
                     :                                                '
     3.       Any c£so of divergence of View between the participating countries an to the
      interpretation or epplic&tion of this Arrangement ray be referred to the Ccrxitts *
     for its opinion .
     /(. .     Tho Committee shall once , a year review the operation of this /.rrnnger.ont and
     report thereon to the GATT Council . To assist An uhis review , the Cer.ir.iittco shall
     have before it a report froi.; the Textiles Surveillance Body , a copy cf which will
     also be transmitted to the Council . The review during the third year shall be a .
     mjor review of this ^rrr.nger.en t in the light of its operation in the preceding
' years .                                                           ' '               .           .  ..
                                                                                ■■
     'j .     The CoEnitteo 'shall rr.eot not Hater than one year before the expiry of this
  . Arrangement in order to consider whether the- arrangement should be extended ,
    modified or discontinued .                                           '               ■
                                                        ΛΓϋοΙβ 11          '" · · ·
    1.        The .Textiles . Coisnitto© shall establish a Textiles Surveillance Body to
    supervise the implementation cf this .vrrangunont . It shall consist cf a Chairman
    and eight members to be appointed by the parties to this Arrangement on a basis
    to be determined by the Textiles Coi-jrattee so as to ensure its efficient operation .
    In order to beep its rectorship balanced and broadly representative of the parties
    to this Arrangement provision shall be ;.;ade for rotation of the cercbers as
    appropriate ,                                     ;                           .                         .
    2.        The Textiles Surveillance Body shall be considered as a standing body and
    shall root as necessary tu carry cut tho functions required J £ it under this
   Arrangement . It shall rely on inf oration to bo supplied by the participating
    countries , . supplemented by any necessary details and clarification it r,ay decide
    to seek from thorn- or fro::-: othur . sources . Further , it :.ny rely. fir technical ,
   assistance on tho services' cf the GaTT secretariat and :;v.:y also hear technical
    experts proposed by one or :.ore of its luembers .                                          *
   3.         The Textiles Surveillance Body shall take the action specifically required
   of it .in articles of this .t.rrangcmeni .
 ---pagebreak---  'ïvrt.m/i
 Parjo 12
 /+.     In thft absence of my jnutuslly agreed solution in bilateral negotiations
  or con suita Li. on s between participating countries provided Tor in this Arrangement ,
 the Textiles Surveillance Body at the request of either party , and following
 a thorough and prompt consideration of the natter , shall n;:3;e recommendations
 to the parties concerned .
 rj .    The Textiles Surveillance Body shall , at the request of any participating
 country , review; promptly any particular measures or arrangements which that
 country con ;risers to be dctriner.tal to its interests where consultations between
 it and the participating countries directly concerned have failed to produce
 a satisfactory solution . It shall Make reconjr.ondaticns as appropriate , to the
 participating country or countries concerned .
 6.      Before formulating its reconanen r.o ti on s on any particular matter referred
 to it , the Textiles Surveillance L; cdy shall invite participation of such
 participating countries as may be directly affected by the matter in question .
 7.      When the Textiles Surveillance Body is called upon to r.ake recccunendations
 or findings it shall do so , except when. otherwise provided in this Arrangement ,
within a period of thirty days whenever practicable . All such rece;n:-:endaticns
 or findings shrill be corjrunicatcd to the Textiles Cor^nittee for the information
 of its l'le.Tibei's .
 8.      Participating countries shall endeavour to accept in full the reco:.'":endatiens
 of the Textiles Surveillance Body , Whenever they consider themselves unable to
 follow any .such reecM'oendations , they shall forthwith infers the Textiles
 Surveillance Body of the reasons therefor and of the extent , if any , to which
they are able to follow the reco;rr.endaticns .                              O
9.       If , following reco:r~.endations by the Textiles Surveillance Body , problems
continue to exist between the parties , these nay be brought before the
Tex Li ] cs Coa: dttee or before the GAT i Council ti .rough the normal GAIT
procedures .
10 .     Any reccir^.endations and observations of the Textiles Surveillance Body
v.'ouJd be taken into account should the natters related to such recommendations
and observations subsequently be brought before the COKTItAGTIKG PAHTIES to
the GATT , particularly under the procedures of Article XX I 1 1 of the GAIT .
11 . The Textiles Surveillance Body shall , within fifteen months of the coraing
into force of this Arrangement , and at least annually thereafter , review all
restrictions on textile products n.ainta ined by participating countries at the
co)r,:iienee:.';ent of this Arrangement , and subirdt its findings to the Textiles
Coram! Ltee .
 ---pagebreak---                                                                                ΤΕΧ.;:Ο/Ι
                                                                                ίο -.: 13
    12 . Tho Textile's Surv/illanco' Body shall onnua'Lly rovi":;v> al1 rostricxior.s intro
    duced or bi'J.; teral «;;ro«jV.:ents entered into by participating countries concerning
    trade? in textile product::- cinco tho coring into forca c£ this Arrantincut , «id
   required to be.. reported t? it under the provisions of thin /grange; > ont , and
   report ajir.uilly its findings to th - Textiles Co^rdttoe .                . .
                                                       $                    *
                                                 Article 12
   1 . " For th .• . purposes of this Arraii^suent , the- expression '''textiles''1 is lir-it .;C
   to tops , yarns , pi jce-£oods , K:.«k--up article :--, yeri/i-nts and other textile nar.u-
   factured products (beiiv; product.';. which derive "lhc:»r chi-.;f characteristics fro:"1,
   tluir tevt.il e component:-.) of cotton, woo?.., nan-nadc fibres , or blends thereof ,
   in which any or all of those fibres in combination represent either the chief
   value of the fibres or 'jO per cent or :/iero by 1.;o:l{;ht ( or 17 per cent or i.:oro by
   voiglit of wool) of th 2 product .                 ...                                     •
   2 . Artificial and synthetic staple fibre , tow , waste , simple, nono- and ;eulti~
   i'ilrjnsnts , ar e not covered by porayraph 1 ubav.:. However ., should conditio:"::-, of
  market disruption ( as defined .in' Ar.rbx A ) bo found to exist for such products , th
   provisions of Article 3 of this Arrangon-nt (and other provision?; of this Arr^i;; e
  nent directly relevant thereto ) and paragraph 1 of Artiole 2 shall rpply.
                                                                               •                *
   3 - Thus /.rranje'jn.-ni :; hv.!Ll not apply to developing country exports of ha.ndloor.
   fabrics of the cottage .industry, or hand-rjade cottage industry products nede of
   such handloo::1 fabrics , or to traditional follnlore handicraft textil.-s products ,
  provided tint such products arc prop.rly certified under errange^ents established
  between, tho importing and exporting participating countries concc-jrned .               *
                                                                 .               o
  /*. Probia::;-; -of interpret etion of th ,. provisions of this Article should be re-
  so'l v-d by l>iJ.ater;d consultation between ihe p:\rtivs concerned and any
  difficulties m-y Lv referred to tho Textiles Surveillance: Body .
        . o         . .       .                          »                     -       .          •
                                                  Artici -*. 13
  1 . Thin /.rr?.i:gep.ont shall be d .- posited with the Director-General to the
  CGiiTJJACTH-IG PARTIES to the CIATT . It shell be op .v n for acceptance , by signature
  or otrierui ;-,.,:, by govern' ! ;. nts contracting parties to the GATT dr hav.i ng
  provisionally acceded to the GATr - and by the J-'.uvopean Leonora c Coix'.iunity .
  2 . ' An;y ;;ov,.rn;.;ent vh'icli .is not a contractin.-.; p;j-ty to th.; C-ATT , or has not
  acceded provisionally to tin GATT , n*iy accede to this Arrangowcnt c>n tc.r;.is to be
  nj-raed be-twoen that (f ;ovv.rn;.H.nt and the prn'ticipoting countrijs . Tiiesc: terras
  would ;i r.eluK ; ;i provision tljet any governnvnt wiiicli is not a co!itr;:cti;v; party ■
. to tlia GATT -.lust undertake , on o.ccedi)!^ to tliis /.rran^ei.ient , not to .introduce
  nov/ i'::j;ort r..-:;tr.i.ctioi:s or intensify existing . inport restrictions , on textile
  products , J.n ;;o fcr as sucli action v.'ould , if th'.it goverr.nent l:ad b-.;7.n a
  contracting pej-ty to the GATT , be inconsistent viib its obligations tljcrcunder .
 ---pagebreak---  TFX.V.C/l '                               .                       ,  '
 Page .1 /;
                               ....       A^lcQje M
1.      This Arrangcihen't .shall enter into force , on 1 January .1974 .
 2.    Not i/iihs Landing the provisions of paragraph 1 of this Article , for tho
application of the provisions of Article 2 , ' paragraphs 2 , 3 and U the date
of entry into force shall bo 1 April 197/+.
                                             • ·  « . ι· .
3.     Upon request of . one or ;.:orc parties which have accepted or acceded to :this
Arrangement a 3-ieoting shall be held within ono week prior to 1 April 197/;.
Parties which at the tiuo of the wo.etjing h«;ve accepted or acceded to t!io
Arrangement 'nay sgrcc on any modification of trie date envisaged in paragraph 2 of
this Article uhicn way appear necessary and is consistent with the provisions of
article 16 .                          ..     .                               '                   .
                                          Article 15             ' '       '
       An y participating country nay withdraw frob this Arrangement upon the
expiration of sixty days from the day on which written notice of such withdrawal
is' received by thy Dire ctor- Gen oral to the CONTRACTING P/JVjTIjCS to the GAT?.
                                         ■Artic le .1 o        •                 '     •   ' . •
                                                                                i •   .
       This Arrangement shall rer.ia.in in force for four . years .                            :
                                         .Article. 1 /     . .                 .
       J he Annexes to this Arrangement constitute an integral part of this
Arrangement ....                    -                                   •'
      DOiviS at Gancva this twentieth day of December . one thousand nine hundred and
seventy- threc^ in a - fr.gle copy in the ihglish , French and Spanish languages ,
each text being authentic .                                 '        /
 ---pagebreak---                                                                                TEX.KG/I
                                                                                ía -.: 13
  12 . Tli o Textiles Sur\\- i llanc o ' Body shall amur-lly review all rostrxouxons intra-
  cluctod or b:i.l; terul a^rocuoritn entered into by participating countvi.-s concerning
  tradu in textile pre.duets since the coring into f'nrej cf this Arrangenent , end
 required to be reported to it under the provisions of this /u'rangsn-int , and
 report annually its findings to th . Textiles Co'enriittee .             . .
                                    •             .  4               •.
                                              Article 12
 1 . For th .• - purposes of this Arran-rsivsnt , the expression " textiles 11 is lirdt.x!
 to tops , yarns , pi jce-goods , rcaefc-up articles , geru.evts and other textile nar.u-
 factured products (being products which derive their cbi-.;f characteristics fro:"1,
 their tv.-.ri.il J components ) of cotton , v,'oal } r»an~nacla fibres , or blends thereof ,
 in v;hich any or all of those fibres in coribim-.tion r epresent either the chief
 value of tho fibres or 'j>0 per cant or more by weight ( or 17 per cent or ;.:or^ by
 voigbt of wool) of the product .                      ..        •#.                      •
 2 . Artificial end synthetic staple fibre , tow , .waste , simple r.ono- ar.d r.iulti-
 filajnents , are not covered by paragraph 1 ubov.:. However , should conditions of
 Market disruption ( as defined in' /.nrbx A ) be found to exist for such products , th
 provisions of Article 3 of this Arrangen^nt (and other -px-ovisions of this >ra^;; :
 nent directly relevant thereto ) and paragraph 1 of Article 2 shall rpply.
                                 X                                         •                4
 3 « This /;rrr.ngo'n..-nt shall not apply to d&vfcloping country exports of handlooi*
 fabrics of the cottage industry, or hand-nade cottage industry products ra.de of
 such handlooa fabrics , or to traditional folV-lore handicraft textiles products , . '
 provided that such products are prep.rly certified under errangeisents established
 between the importing and exporting participating countries concerned . '
                                                               .             o
A - Probl            ,of interpret etion of th,. provisions of this Article should be re~
 solved by bilateral consultation between the partivs concerned and any
difficulties way bv referred to the Textiles Surveillance Body .
       . 0 ....                                 . •                        *      .       \ •
                       '     ■                 Article 13
.L. This Arrangement shall be depesited with the 'Director-General to the
CGiJ'J'iiACTJ.l.'G PARTIES to the GATT . It shall bo open for acceptance , by signature
or otherwise , by govern' unts contracting parties to the GATT or having
provisionally ucceded to the GATxand by the jSuropean Jilcononic Coixounity ,
2 . ' Any govomaant which is not a contracting party to x\u: GATT , or has not
acceded provisionally to tin GATT , nay accede to this Arrangement on terms to be
agrr.ed bolvjcen that government and the participating countri m . Thesv- terr-.s
vou.l.d include ;i provision thet any governnvnt which is not a contracting party
to the GATT .oust undertake , on acceding to this /.rrangenent , not to introduce
new import restrictions or intensify existing . import restrictions , on textile
products , in so far as such action would , if that government had b^en a
contracting party to tin: GATT , be inconsistent with its obligations thereunder .
 ---pagebreak---  TFX.]':C/1
 l'âge 1/,
                                 .... - hrCxcle ."U
 1.     This Arrar.Gcihcirl .shall enter into force on 1 January I974 .
 2.     NotwiihK landing the provisions of paragraph 1 of this Article , for tho
application of the; provisions of Article 2 , ' paragraphs 2 , 3 and /+ the date-
of entry into force shall bo 1 April 197/+.
                                              • •  é . I « .
3.     Upon request of . one or ;.!oro parties which have accepted or accedea to this
Arrangement a meeting shall bo held within ono week prior to 1 April 197/* .
Parties whiqh at the tif.io of the; no.et.i.ng have accepted or acceded to t!io
Arrangement nay agree on any nodi fication of the date envisaged in paragraph 2 of
this i-.rticlo whicn i.vny appear necessary and is consistent with the provisions of
Article 16 .                           ..                                     ,
                                           Ariic!!e 10
       J:. r.y participating country nay withdraw froh this Arrangement upon tne
expiration of sixty days fro.:i the day on which written notice of such withdrawal
is' received by thy Director - Gen oral to the CGi\'T7i ACTING P/J\TI;V3 to the CIATT .
                                          Artic'Jo ]6          •                    •   . •
                           " Q
                                                                                • •
       i'his Arrangement shall rer.ia.in in force for four . years .                      :
                                          .Article 17                       .
       'J.he Annexes to this Arrangement constitute an integral part of this
Arrangement ....                     •                   ••
       D0K£ at Gsncva this twentieth day of December one thousand nine hundred and
seventy- thrcc^ in a " ingle copy in the English , French and Spanish languages ,
each text being authentic .
 ---pagebreak---                                                                                TSX.NG/1
                                                                                F£r:s
                                         ..      . OTMA:                 . ••           ■■ •• :
  I. _ !!h'c do.tc'r.Yj nation .of a '.situation of ilwarket . disruption ", as referred : to" "in
  this: arr'ie^aont ,. .'shall by.-.- . based .on the -,existence of serieus damago to ; do:nestic :
  producers or actual thr-eat thereof .._ Such danage aust . deccnstr.ably . be .caused • -by '
  the factor's 'set 'out in 'paragraph . II. .below, and not "by . factors such as technological
  changes or changes' ir/ con'sur-ier . preference, .which aro instrumental \in : switcb<~p" to .
  llii.o cJ.-d/c'r '.directly oo-;pc'tit:i,vo* .prbdi'.cts ; iaader-by .the .capo industry , or similar
  faC.tcrsV 'The L>:'is'tcncc . c-f .d«rja£C- shall .,bo. determined on the basis of an csxarina-
  tioh'of the appropriate factor ;; having a bearing on the evolution of the state cf
  the . industry in question such as : turnover , < rsarkot . share , profits , expert :.;
 yitfformanc'o , bmploy.icnt;, volume of . disruptive and other imports ,;: predu'etieir,: •'
  utilisation of capacity , productivity ' and investments .                       l;;o one or several ,.of these
  factors 'can necessarily givo . decisive guidance . ; . •■.                              ;    .,                 J v. - ' v
                            *.                       »          .           .  •
'11' . . The . factors, censing «cr!:fct disruption referred , t.o . in paragraph I above and
  whicii " generally appear in combination are as follows ;                                        . .     :
  (i ) a .sharp fyid substantial .. increase or ii.iminent; increase of imports . ofapsrticiiiar
          products 'from particular sources .            Such an -imminent increase - shall be a •: -
          Moasux-ablo 'one ' and shall      not be determined to exist on the basis of
          allegation , conjecture or mere possibility arising , for example , " from 'the
 • ' ' '(pelsten do of production capacity in tiie exporting countries ; . ■                                     .
  (n ) ' those products are offered at prices which are substarrt.iaj.Iy below." these
          prevailing for similar goods of comparable quality in the market of the
        . importing country . Such . prices shall be , compared .bo "ch with -.the price for
      ■' the domestic' product at conparablo stage of co;x-.orcial transaction , r. and with
          the prices which normally prevail for such products sold in the ordinary
          course . of . trade . and . under open market conditions by other exporting countries
          in the importing country ..; .,                            ■ .        •.                     •.*               '
 III ." In considering' questions of "market disruption 1' account shall be taken of the
interests of the expor ting country, especially in. regard to . its stage of . • •"
 development , tiie importance , of the textile sector to the economy , • the ., employment '
 situation , overall ba'lohoe of.'"trade in textiles ,, trade- balance with the importing"
 country concerned 'end " overall balance of payments .                       •       .
 ---pagebreak---    TEX . I;G/l
   l~ago .16
                                          A!:;;EX B
   1.       (.'0 lb a ] ovel below which imports or oxports of textile products may not
   bo restrained unckr tho provisions of Article 3 shall bo the level of actual
   imports or exports of sue}: products during the twelve-month period terminating
   two months or , whore data are not available , th_ree months preceding the month in
   which tho" request for consultr.tion is nnd ?, or , vhere applicable . tho data of
1 institution of such domestic procedure relating to market disruption in textiles
   as may bo required by national legislation, or two months or , vhcre data are not
   available , three months prior to the month in which tho request for consultation
   is made as a. result of such domestic procedure , whichever period is the later . •
           (b ) VJhore a .restraint on the- yearly level of exports or imports exists between
   participating countries concerned , whether provided for under Article 2 , 3 or 4.,
   covering the twelve -Month period referred to in paragraph ( a ), the level bolev;
  which ijnports of textile products causing market disruption may not be restrained
  under tho provisions of .Article 3 shall be the level provided for in the restraint
  in lieu of the level of actual imports or exports during the twelve-month period
  referred to in paragraph ( a ).
          Uhore the twelve-month period referred to in paragraph ( a ) overlaps in
  part with the period covered by the restraint , the level shall be :
           ( i ) tho level provided for in the restraint , or the level of actual 'its-ports
          or exports , v.'hichcver is higher , except in case of overshipment , for the
          months where the period covered by the restraint and tho twelve-month period
          referred to in paragraph ( a ) overlap ; and
          ( ii ) the level of actual imports or experts for the months where no overlap
          occurs .                    '             •              •
                                                  i
          ( c ) If the period referred to in paragraph ( a ), is specially adverse for a
 particular exporting .country due to abnormal circumstances , the- past performance
  of imports fro;-, tiiat country over a period of years shoulv? ne taken into account.
          ( d ) l.'hero imports or experts of textile products subject to restraints were
 nil or negligible during tho twelve-month period referred to in paragraph ( a ), a
 r ease.nab] e import level to take account of future possibilities of tho exporting
 country shall bs established through consultation between the participating
 countries concerned . ''                                        -       • .
 2.      Should the restraint Measures remain in force for another twelve-month period ,
 the leva] for that period she- 11 not be lover than the level specified for the
 preceding twelve.-month period , increased by not less than 6 per cent for products
 under restraint . In exceptional cases whore there are clear grounds for holding that
 the situation of market disruption will recur if the above growth rate is
 ---pagebreak---                                                                                ïsc.nvi
                                                                                Page 17
  inp3 evented , a lousr positive growth rata way bo decided upon after consultation
 with tho expjrtin ^ country or countr .los concerned .      In exceptional cases vhor j
 participating importing countries have srsall jcnrkets , an exceptionally high level
 of imports oxd a correspondingly lev; 1 ev el of domestic production and vhero the
 inplsr3c-iits.tion of the abovo f;rov;th r?.to vould causo da-jag * to thoso countries'
 irdni.'V.U'Tj viable production , a lever positive growth rat 2 nay . be decided uron after
 consultation with the exporting country or countries concerned .
 3.        Should the restraint ;neasures ro:nain in fores for further periods , the level
 for each subsequent period shall not be lov;er than the level specified for-         t he
 preceding tv;<*lve~nonth period , increased by six' par cent , unless there is furth or
 now evidence which demonstrates , in accordance with Annex A , that i:epio:~ontation
 of the above grovth rate v;ould e-xacerbato the situation of market disruption .
 In these circumstances , after consultation with the exporting country concerned ,
 and reference to the Textiles durvsillarica Body in accordance - with the procedures
 of .Article 3 a lover positive growth rate way be applied .
U.         In. the event r.r.y restriction or limitation is established under Article 3 or 4
on a product or products as to v.'hich a restriction or ?.ij.rltaticn had been s\;pprr.ss:--d
in accordanc3 vita the provisions of Article 2 , such subsequent re5tricti.cn or .
liniteti.cn shall not be re-establiskc d without full consideration of the limits
of trr.de provided for under such suppressed restriction or lir:dtaticn ,
          Uhere restraint is exercised for Tiore than one product the participating
countries agree that , provided that the total exports subject to restraint do not
exceed the aggregate? level for all products so restrained ( on the basis of r. cordon
unit to be determined by the participating countries concerned ), the agreed level
for any one product i;.-.y be exceeded by 7 per cent save in exceptionally and •
sparingly used circumstances where a lover p&rconta?;c. :.:ey be justified in v;hieh
case that lovrer percentage shall be not loss than 5 per cent . Jhere restraints are
established for nore years than one , the extent to ' /hick the ictol of the restraint
level for or.e product or product group, nay , after consultation bet>.:c.-n the parties
concerned , be exceeded in either year of any tvo subsequent years by carry forward
and/or carryover is 10 per cent of which carry forward shall r.ot represent mere
than 5 per cent .-                       .                                - •
6.        In the application of the restraint levels and growth rates specified in
paragraphs 1 to 3 above , full account shall bo taken of the provisions of
Article. 6 .                                                                                •