 
  WORLD TRADE  
ORGANIZATION  G/TMB/N/476/Add.1 
30 June 2004 
 (04-2804) 
Textiles Monitoring Body Original:   English 
  
 
AGREEMENT ON TEXTILES AND CLOTHING 
 
Communication from Canada
 
 
Addendum  
 
 
 The following communication, dated 23 June 2004, from the Delegation of Canada, is being 
circulated to WTO Members for their information.  
 
   G/TMB/N/476/Add.1 
Page 2  
 
 Permanent Mission of Canada to the United Nations
 
Geneva  
   
 
23 June 2004 
   
 
Mr András Szepesi Chairman Textiles Monitoring Body World Trade Organization 
Centre William Rappard 
Rue de Lausanne 154 1211 Genève 21    
Dear Mr Szepesi, 
  I am writing in response to your letters of  28 May and 1 June 2004, seeking further 
clarifications and elaborations on issues raised by  India on behalf of members of the International 
Textiles and Clothing Bureau (ITCB) and comment on the information included by the TMB. 
 
 With respect to issues raised by I ndia on behalf of members of the ITCB
1, Canada would like 
to make the following points:   
• Canada wishes to reaffirm its continuing commitment to the full implementation of 
the ATC.  Canada has fully complied w ith the ATC obligations set out in the 
transition provisions.  As Canada indicat ed in its communication of 13 May 2004 to 
the TMB, all textile and apparel products not integrated during the first three stages of 
integration into GATT 1994 will be integrat ed by 1 January 2005 and the quantitative 
restrictions on these products will be eliminated by that date. 
 
• Canada has significantly and meaningfully  liberalized its restraint regime by 
removing quotas on products of direct interest to exporting countries.  In the first two 
phases, we removed from quota the following commercially-significant products:  
tailor collared shirts, rainwear, women’s & girls’ ensembles, women/girls knitted 
blouses, children’s blouses and baby outerwear.  In addition, in 1998 we increased by 
10 per cent the restraint levels for winter outerwear, over and above what the required 
growth rates specified in the ATC.  
 
• For the third phase of the ATC, Canada inte grated a wide range of apparel products 
including women’s/girl’s/child ren’s suits and ensembles, all knitted and woven shirts, 
blouses and tops, swimwear, all babywear, a nd thermal and standard  overalls.  Quotas 
were removed from apparel products, irrespectiv e of the material they are made of.  
                                                     
 
1 See G/TMB/N/474.  G/TMB/N/476/Add.1 
 Page 3 
 
 
 None of the partially liberalized quotas, and none of the combined quotas, were 
readjusted, which resulted in a further de facto  increase in access to our market. 
 
• On the textile front, Canada has traditionally maintained quotas on only few of its 
imports.  Restrained imports of yarns and made-up textiles added up to less than 5 per 
cent in 1990.  Over 85 per cent of fabrics we re imported free of quota that year.  Still, 
our industry has been adapting and developing markets for its products, to prepare for the new trading environment.  In addition, this industry is adapting to intensified 
competition arising from regional and bilateral trade initiatives. 
 
• Canada has implemented measures to improve access for imports from least 
developed countries (LDCs), notably through the elimination of quotas and tariffs on 
textile and apparel products or iginating in LDCs as of 1 January 2003.  Under the 
rules of origin, apparel products exported from LDCs will be eligible for duty-free 
treatment provided they are cut, or knit to  shape, and sewn or assembled from inputs 
from any of the 48 eligible LDCs.  Input s from General Preferential Tariff (GPT) 
beneficiary countries may also be used provided at least 25 per cent of the content of 
the apparel goods originates in the LDC exporting country.  The rules of origin for 
fabrics and yarn allow for full accumulation of originating inputs from LDCs or GPT 
beneficiary countries, as well as from Canada.  
 
• The growth of Canada’s dom estic apparel market, accordi ng to Canada’s Department 
of Industry, has been 1.5 per cent annually for the past five years.  By comparison, 
with very few exceptions, the average growth rate for apparel quotas into Canada is in 
excess of 8 per cent a year.  
 
• Imports have been growing significantly also because under the ATC 
growth-on-growth provisions, our annual quotas are now growing at a fast clip.  In terms of major suppliers, for example, India benefits from an annual compound 
growth rate of almost 11.5 per cent per a nnum;  and, Pakistan’s growth rates are 
expanding by 11.5-14.7 per cent per annum.  
 
• The small exporters’ growth-on-growth provisions provide for meaningful and 
significant increases in quota levels for produc ts under restraint from these suppliers.  
Small supplier growth rates had, in fact, dou bled by the third phase of the ATC.  As 
an illustration, Sri Lanka’s and Mauritius’  quotas are both expanding by 12.1 per cent 
per annum.  Moreover, in implementing the small suppliers’ growth-on-growth 
provisions, Canada adopted a methodology fo r definition for small suppliers which 
resulted in 16 exporting developing count ries benefiting from this provision, five 
more than strictly required by the ATC.   
 
• Canada has not requested any consultations under Article 6 of the special safeguards 
provision. 
 
• Over the past nine years, cotton-producing exporting countries have never raised the 
matter of the particular interests that they might have in the export of cotton products.  
In this respect, it should be noted that th e structure of Canada's textile restraint 
category system, with few exceptions main ly for fabrics, does not differentiate 
products according to fibre type.  This a llows exporting Members a wider latitude to 
diversify their exports according to the needs of the market.  Canada also included in 
its LDC initiative all cotton textile and appa rel products.  Canadian authorities, have G/TMB/N/476/Add.1 
Page 4  
 
 always been prepared to consult with cotton-producing exporting Members with 
respect to their particular interests. 
 
• In regards to Canada’s administrati ve arrangements undertaken pursuant to 
Article 2:17 of the ATC, these arrangements are used to administer the provisions of 
the ATC and will expire along with the ATC on 31 December 2004. 
 
We have also reviewed the tables prepar ed by the TMB, summarizing the quantitative 
restrictions affected by the third stage of inte gration implemented by Ca nada.  We have noted a 
number of omissions/errors which are indicated in annex.   
 Yours sincerely, 
    
 
 (signed)  Hon. Sergio Marchi  Ambassador   Permanent Representative 
 
 
    
 
 
 
   
 
   G/TMB/N/476/Add.1 
 Page 5 
 
 
 Table 1 
Specific Limits and Sub-Limits, Co mprising Single or Merged Categories  
and Sub-Categories Fully Eliminated by Canada as a Result of the Implementation  
of its Stage 3 Integration Programme  
   
Category/Sub-Category/Merged 
Categories 
Subject to Restraint  
WTO Members Affected 
7.0** Chinese Taipei;  Myanmar;  Pakistan;  India 
7.0/8.1** Romania;  Sri Lanka*;  Thailand*;  Swaziland;  United Arab Emirates 
7.1, 7.2/8.1** China*;  Hong Kong, China*;  Korea* 
8.1 Chinese Taipei* 
12.0 China;  Chinese Taipei;  Hong Kong, Ch ina;  Qatar;  Philippines;  Sri Lanka;  
Swaziland;  Thailand;  Macao, China 
14.0 Bangladesh;  Chinese Taipei;  Hong Kong, China;  Indonesia;  Korea;  Malaysia;  
Philippines;  Qatar;  Singapore;  Sri Lanka;  Swaziland;  Thailand;  United Arab Emirates;  Macao, China 
14.2 Chinese Taipei 
14.2 – 14.9 China 
14.3 Chinese Taipei 
14.4 Chinese Taipei 
14.5 Chinese Taipei 
14.6 Chinese Taipei;  Romania 
14.7 Chinese Taipei 
14.8 Chinese Taipei 
14.9 Chinese Taipei 
*Denotes sub-limits to be fully eliminated,  while a part of the respective broader specific limits continues to be maintained. 
**Part of the respective category/sub-categories were already  removed from restraints in relation to WTO Members on 
1 January 1998, pursuant to Article 2.15.  Source:  Table 3 of G/L/459, as updated on the basis of G/TMB/N/62/Add.3, Add.3/Corr.1, Add.4, Add.4/Corr.1;  also 
G/TMB/N/370 and its Corrigenda.
 
 G/TMB/N/476/Add.1 
Page 6  
 
 Table 2 
Specific Limits and Sub-Limits, Comprising Single or Merged Categories and  
Sub-Categories Partially Eliminated by Canada as a Result of th e Inclusion of Parts of the Respective Categories or Sub-
Categories Subject to Restraints in the Stage 3 Integration Programme  
   
Category/Sub-
Category/Merged 
Categories 
Subject to Restraint Part of the Respective 
Category/Sub-Category 
Integrated  
WTO Members Affected 
3.0/4.0 4.1** Philippines;  Sri Lanka;  United Arab Emirates; Swaziland 
3.2/4.0 4.1** Malaysia;  Philippines*;  Romania;  Singapore 
3.2/4.1, 4.2 4.1** Bangladesh***;  China;  Hong Kong, China;  Pakistan 
4.0 4.1** Bulgaria;  Indonesia;  Korea;  Swaziland;  Thailand;  India 
4.1, 4.2 4.1 Chinese Taipei;  Macao, China 
7.0/8.0 7.0/8.1** Hong Kong, China;  Indonesia;  Malaysia;  Sri Lanka;  
Thailand 
7.0/8.1, 8.2, 8.3 7.0/8.1** China;  Korea;  Oman;   Qatar;   Philippines;  Singapore;   
Swaziland;  United Arab Emirates 
7.0/8.1, 8.4 7.0/8.1** Bangladesh*** 
8.0 8.1 Chinese Taipei 
8.1, 8.2, 8.3 8.1** Pakistan;  South Africa 
12.0/13.0 12.0 Korea 
8.1, 8.3, 8.4 8.1 India 
7.0/8.1 7.0/8.1 Romania;  Swaziland;  United Arab Emirates 
*Denotes sub-limit. **Part of the respective category/sub-category was already removed from restraints in relation to WTO Members on 
1 January 1998, pursuant to Article 2.15. 
***All the remaining restrictions on imports, for goods qualifyi ng for the LDC Initiative, from Bangladesh were subsequently 
removed by Canada, on 1 January 2003, as a result of the implementation of its Market Access Initiative for Least-Developed Countries.  See paragraphs [...} below. 
 
Source:  Table 4 of G/L/459, as updated on the basis of G/TMB/N/62/Add.3, Add.3/Corr.1, Add.4, Add.4/Corr.1;  also G/TMB/N/370 and its Corrigenda.  G/TMB/N/476/Add.1 
 Page 7 
 
 
  
Table 3 
Product Categories and Sub-Categories Subject to Partial Elimination  
of Restrictions as a Result of the Implementation by Canada of its Stage 3 Integration Programme  
 
 
 
Category/ 
Sub-Category  
Product Integrated  
WTO Members Affected 
 
 
2 and/or 5.4 Men's and boys', women's 
and girls', children's bib and 
brace overalls, knitted, 
crocheted, woven Bangladesh*;  Bulgaria;  China;  Chinese Taipei;  Hong 
Kong, China;  India;  Indonesia;  Korea;  Lesotho*;  
Macao, China;  Malaysia;  Mauritius;  Myanmar;  
Pakistan;  Philippines;  Qatar;  Romania;  Singapore;  Slovak Republic;  South Africa;  Sri Lanka;  Swaziland;  Thailand;  Turkey;  United Arab Emirates 
22.1 Nylon filament yarn Chinese Taipei;  Korea 
22.2 Nylon staple yarn Chinese Taipei;  Korea 
23.1 Polyester filament yarn Chinese Taipei;  Korea 
31.1 Combed wool fabrics Bulgaria;  Chi na;  Chinese Taipei;  Czech Republic;  
India;  Korea;  Poland;  Romania;  Slovak Republic;  Uruguay 
32.1 Unbleached cotton fabrics Chinese Taipei;  Korea;  Hong Kong, China 
32.2 Finished cotton fabrics, 
woven China;  Chinese Taipei 
32.3 Coated cotton fabrics Chinese Taipei;  Hong Kong, China;  India 
34.2 Coated fabrics from high 
tenacity yarn Chinese Taipei;  Poland;  Thailand 
35 Polyester filament fabrics, 
coated Chinese Taipei;  Korea;  Poland 
36.2 Coated poly/cotton fabrics China;  Hong Kong, China;  Korea;  Chinese Taipei 
37.1 Coated poly/rayon fabrics Chinese Taipei 
37.2 Coated fabrics from other 
artificial filament Korea 
43.2 Hosiery, for babies China;  Chinese Taipei;  Korea;  Singapore;  Thailand 
 
*The remaining restrictions on imports from Banglades h and Lesotho were subsequently removed by Canada, on 
1 January 2003, as a result of the implementation of its Market Access Initiative for Least-Developed Countries.  See 
paragraphs [...} below.  Source:  Table 2 of G/L/459, as revised and also updated on the basis of G/TMB/N/62/Add.3, Add.3/Corr.1, Add.4 and 
Add.4/Corr.1.
 
 
__________ 
 